Ordering and carrying costs by using the EOQ model

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An office supply distributor uses 1200 boxes of packing material per month, which it purchases at a cost of $30 each. The distributor has assigned an annual carrying cost of 25% of the purchase price. Ordering costs are $20 per order. The distributor currently orders once per month. How much could the firm save annually in ordering and carrying costs by using the EOQ model?

Reference no: EM131028645

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