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How much safety stock should the company keep

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Archers Corp. projects its sales to be 1,000,000 units this year. As a result of holding inventories, insurance, storage, taxes and other cost are incurred amounted to P2 per unit per year. P16.00 is incurred, every time Archers Corp. makes an order, On the average it takes 5 days to make and receive an order. (Use 360 days a year). Assuming Archers Corp.'s inventory may take as 9 days to respond. How much safety stock should the company keep?

Reference no: EM132537844

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