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Determine the proper order size

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Reference no: EM132885088

Problem - A material is purchased for $ 3 per unit. Monthly usage is 1,500 units, the ordering cost is $ 50 per order and the annual carrying cost is 40%.

Required -

(a) Compute the economic order quantity.

(b) Determine the proper order size if the material can be purchased at a 5% discount in lots of 2,000 units.

Reference no: EM132885088

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