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Determine the formula of the Economic Order Quantity.
The formula for Economic Order Quantity (EOQ):
EOQ = √((2x CO x D)/(CH)
Here
D = Annual demand (units)
CO = Fixed cost for every order placed
CH = Cost of holding one unit into stock for one annum (it may comprise a cost of capital for money' tied up' within the value inventory).
Contrast the advantages and disadvantages of absolute standards and relative standards.
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