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A retailer of a particular product has estimated its annual sales of the product at 38,000 per year. Its purchase cost is $4. The Order cost is $9 per order. Inventory holding costs are 25% of the wholesale cost.
a) What is the EOQ?
b) What is the total annual cost?
c) Suppose L= 3 days and the firm is open 5 days/week. Calculate the reorder point.
d) What is the average order interval?
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