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Suppose you purchase a $4 -per-unit part from a supplier with which you assemble red widegets. On average, you use 50000 units of this part each year. Every time you order this part, you incur a sizable order cost of $800 regardless of the number of parts you order. Your cost of capital is 20% per year.a) How many parts should you purchase each time you place an order?b) To satisfy annual demand, how many times per year will you place orders for this part?
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