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Tiger Corporation purchases 1,180,000 units per year of one component. The fixed cost per order is ?$22
The annual carrying cost of the item is 26.1?% of its ?$1.77 cost.
a. Determine the EOQ if (1) the conditions stated above? hold, (2) the order cost is zero rather than ?$22 and? (3) the order cost is ?$22 but the carrying cost is ?$0.01
b. What do your answers illustrate about the EOQ? model? Explain.
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