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You are the operations manager of a firm that uses the continuous review inventory control system. Suppose the firm operates 252 days a year and
You are the operations manager of a firm that uses the continuous review inventory control system. Suppose the firm operates 252 days a year and has the following characteristics for its primary item:
Demand = 25,000 units/year
Ordering cost = $26/order
Holding cost = $5/unit/year
Lead time = 4 days
Standard deviation in daily demand = 2 units
What is the total setup cost per year (to the nearest whole number)?
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