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How much should you order

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Question - The annual demand for a product is D = 700 units. Annual inventory holding costs are 20% of the purchase price, while ordering costs are $275 per order.

The supplier of the product offers quantity discounts on purchase as described in the table below.

Quantity 1 to 199. PRICE $65 per unit

200 to 599 Price $59 per unit

600 and more PRICE $56 per unit

Required - How much should you order if you want to minimize total annual inventory costs?

Reference no: EM133159563

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