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The Candy Shack has a monthly demand of 120 bags of Watermelon Slices. They pay $11.51 for each box of candy which contains 24 bags for sale. Their ordering costs are $60. Holding costs are negligible but they do pay 13% annually on the money they borrow to make such purchases.
1. What is the annual demand-in terms of boxes?
2. What is the materials costs-per bag?
3. What is the economic order quantity (EOQ)-in terms of bags?
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