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Question: A store sells four packs of Camel cigarettes each day. Ordering cost is $8.00 per order, and Camel cigarettes cost $3.20 per pack. Three days after an order is placed, it is received. Daily holding costs are equal to 5% of the cost of the cigarettes.
What is the economic order quantity for Camel cigarettes?
If the store were to order 16 packs of Camel cigarettes at a time, what would be the length of an order cycle?
At what point should the store reorder Camel cigarettes?
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