The cost of placing and receiving an order

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Reference no: EM131358157

Suppose Acme Inc. expects to sell 3600 units per year. The cost of placing and receiving an order is $125 per order. Each unit costs Acme $40. Carrying costs are 25 percent of the purchase price.

a. Calculate the number of units that Acme should order at a time if it is to minimize its total inventory costs.

b. What are Acme’s total costs of ordering and carrying inventory for a year?

Reference no: EM131358157

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