Explain what monthly penalty is the company incurring, Operation Management

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A food processor uses approximately 29,730 glass jars a month for its fruit juice product. Because of storage limitations, a lot size of 4,000 jars has been used. Monthly holding cost is 18 cents per jar, and reordering cost is $60 per order. The company operates an average of 20 days a month.

What monthly penalty is the company incurring by its present order size?


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