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Dorsey Distributors has an annual demand for 1400 units of a metal detector. The cost of a typical detector to Dorsey is $400. The carrying cost is estimated to be 20% of the unit cost, and the ordering cost is $25 per order. If Dorsey orders in quantities of 300 or more, it can get a 5% discount on the cost of the detectors. Use Economic Order Quantity (EOQ) to determine whether Dorsey should take the quantity discount. Assume the demand is constant.
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