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Currently the company has an annual demand of 10,000 units of inventory. Average cost per order is $7 and supplier takes from 5 to 21 days to deliver after receiving order.
Normal purchase price of the product is $40, however; for an order of 1,500 units supplier gives a discount of 5%.
Annual cost of holding one unit in stock =$2.
Evaluate whether entity should buy EOQ or 1,500 units of goods per order?
Requirements:
Answers submitted
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