What is the annual saving achieved by adopting

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A hospital uses trays at the constant rate of 200 per month; these are purchased from an outside supplier for $8 each. The cost of placing an order is $48, while the annual inventory holding cost is 18% of the value. a) Find the optimal order quantity for trays. (400) b) What is the total cost per year (order cost plus inventory holding cost)? ($576) c) Suppose the hospital currently buys trays in batches of 200. What is the annual saving achieved by adopting the optimal policy of part a? ($144)

Reference no: EM13224823

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