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According to the innovative JIT approach there is a plan to optimize expenses on the basis of requirements in an enterprise in a local region. In order to reduce the expenses and make savings on cost taking into consideration JIT approach an innovative company has to minimize the inventory cost at the beginning of optimization. The company carries an average annual inventory of USD 12,000,000. If it estimates the cost of capital is 10%, storage costs are 7%, and risk costs are 6%, what does it cost per year to carry this inventory?
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