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What is the economic order quantity

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ABC Hardware store is open for business 350 days a year. Annual demand for a power  cutter at this store is 700 units. Replenishment cost is $15 per order and annual inventory  holding cost is 10% of the inventory value. ABC pays $20 for each power cutter . What is the economic order quantity for this cutter, and what is the reorder point if the lead time is 5 days and ABC policy is to keep a safety stock of 10 units?

 

Reference no: EM13801786

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