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Zip Games purchases blank 3.5-inch disks onto which it copies its software for sale through its mail order operation. A disk costs Zip $.20. Processing an order for more disks cost $15. Zip uses 60000 disks annually, and the company has a 25% cost of capital.
a. Find the optimal order quantity.
b. How many orders are placed annually?
c. How frequently will orders be placed?
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