What is the optimal order quantity

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Suppose that MW Inc. has a production rate of 450,000 units per year, and a daily demand of 1500 units on each working day (assume 250 working days per year). They estimate that is costs $140 to setup for each production run, and the holding cost percentage is 20% of the unit cost. The product is sold for $50 per unit, and the unit cost is $30.

What is the optimal order quantity?

How many units does the warehouse need to be able to hold?

Reference no: EM13844256

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