Quantity should it use to minimize ordering and holding cost

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A firm’s annual demand for a product is 100,000 units. It has a holding cost of $20 per unit per year and an ordering cost of $10 per order. Since the supplier boxes its products into 150 units per box, the firm is required to order an integer multiple of 150 units. Suppose the firm orders the quantity that adheres to the supplier's integer multiple requirement, what is the cost they incur?

What order quantity should it use to minimize ordering and holding costs?

Reference no: EM132099892

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