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Mombong LLC manufactures electronic components for televisions. The expected annual demand is 40,000 units per year. The order cost is $150 per batch and the annual holding cost per unit is $0.80.
Required:
Problem (a) Explain the purpose of the Economic Order Quantity, and the underlying assumptions.
Problem (b) Using the above given information, compute:
i) the economic order quantity.ii) the annual cost of ordering and holding
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