Calculate the annual ordering cost

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Reference no: EM13104202

Item X is a standard item stocked in a company's inventory of component parts. Each year the firm, on a random basis, uses about 2000 units of X which costs $25 each. Storage cost amounts to $5 per unity of average inventory. Every time an order is placed for more item X, it costs $10.

a. Whenever item X is ordered, what should be the order size?
b. What is the annual ordering cost?
c. What is the annual storing cost?

Reference no: EM13104202

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