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Cost of placing an order is $20
Number of the unit to be purchased during the year is $500
Purchasing price per unit inclusive of transportation cost is $50
Annual cost of storage per unit $50
Details of lead time
Average 10days , maximum 15 days, Minimum 6days for emergency purposes 4days
Rate of consumption
Average 15 units per day, maximum 20
Problem 1: Calculate reordering level, maximum level, minimum level and danger level
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