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Calculate the economic order quantity

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Question

Diamond Pacifica, a major sales distributor in the South Pacific, intends to determine the economic order quantity for its car batteries. It currently purchases its batteries from Pacific Battery in Papua New Guinea. Annual demand is 5.000 batteries, ordering cost per order is $30, and annual carrying cost per battery is $15.

a. Calculate the EOQ (Economic Order Quantity).

b. Calculate the total annual costs of holding and ordering.

c. How many orders should Diamond Pacifica place with Pacific Battery per year?

Reference no: EM133515925

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