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Question
Discount-Mart, a major East Coast? retailer, wants to determine the economic order quantity for its halogen lamps. It currently buys all halogen lamps from Specialty Lighting? Manufacturers, in Antigonisch. Annual demand is 2,000 lamps, ordering cost per order is $30?, and carrying cost per lamp is $12. As part of its new JIT program, Discount-Mart has signed a? long-term contract with Specialty Lighting and will place orders electronically for its halogen lamps. Ordering costs will drop to? $0.50 per? order, but? Discount-Mart also reassessed its carrying costs and raised them to? $20 per lamp. How do your answers to the above two situations provide insight into a JIT purchasing? strategy?
The economic order quantity _____ (increased or decreased or not changed)? From ____ to ______?
and deliveries ______ (increased or decreased or not changed)? From ____ to ______?
The total annual costs of holding and ordering? (managing) this inventory changed from ____ to ______?
Thus the annual costs of holding and ordering? (managing) this inventory is _____ (increased or decreased or not changed)?
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