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The Webb Company estimates that it will need 18,000 units of Material X next year, at a cost of $15 per unit. The estimated carrying cost is 20% of average inventory investment and the cost to place an order is calculated to be $15.
Required:
Problem 1: Compute (a) the EOQ, (b) the frequency with which orders should be placed, in days, based on a 365-day year, and (c) the EOQ if Material X costs $6 per unit and other estimates remain unchanged.
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