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A supervisor of inventory control in a supermarket is generating a total inventory cost report for peanut butter. He/she has the following information: The price of peanut is $23/bag, the carrying cost percentage is 10%, the annual use is 8000 bags and the cost of placing an order is $310. It usually takes 16 days to get an order.
1) Find the Economic Order Quantity (EOQ)?
2) What is the total inventory costs (Minimized Total Costs) and the best reorder point (ROP)?
3) Please describe how to use the Total Cost (TC) model, Carry Cost (CC) model and Ordering Cost (OC) model to find the EOQ (Economic Ordering Quantity) point on a graph?
Please explain it with steps
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