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Determine the eoq under no changes order cost of zero

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Tiger Corporation purchases 1,200,000 units per year of one component. The fixed cost per order is $25. The annual carrying cost of the item is 27% of its $2 cost.

a. Determine the EOQ under each of the following conditions: (1) no changes, (2) order cost of zero, and (3) carrying cost of zero.

b. What do your answers illustrate about the EOQ model? Explain.

Reference no: EM131109333

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