Question related to inventory management

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Reference no: EM13109765

ABC distributors has an annual demand for an airport metal detector of 1,400 units. The cost of a typical detector to ABC is $400. Carrying cost is estimated to be 20% of the unit cost, and the ordering cost is $25 per order. If the owner orders in quantities of 300 or more, he can get a 5% discount on the cost of the detectors. Should ABC take the discount?

Reference no: EM13109765

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