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Problem 1: A firm uses 1400 units per year of component G. Each order costs £350 to make and average storage costs per unit of G are £20. There is also an extra capacity cost given that the form has to provide warehousing capable of storing a full order size of q even though this warehousing space will be underutilized most of the time. This 'capacity' cost will be £15 per unit of G. Adapt the optimal order size formula to include this extra cost and then find the optimal order size for this firm.
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