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Question - Firm EX faces regular demand of 150 units per month. It orders from its supplier at a purchase cost per unit of $25. Each order costs $32, and annual holding cost is $4.50 per unit.
Required -
1. Calculate the economic order quantity, and the average inventory level.
2. Calculate total inventory-related cost at this economic order quantity.
3. Calculate whether either of the following bulk purchase discounts should be accepted:
- Discount of 2% given on orders of 300 and over
- Discount of 4% given on orders of 800 and over
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