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Item X is a standard item stocked in a company's inventory of component parts. Each year the firm, on a random basis, uses about 2,400 of item X, which costs $25 each. Storage costs, which include insurance and cost of capital, amount to $4 per unit of average inventory. Every time an order is placed for more item X, it costs $18. Calculate the order quantity and the annual ordering cost for item X.

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Purchasing and Supply Chain Management
Purchasing and Supply Chain Management
6th Edition
ISBN: 9781285869681
Author: Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher: Cengage Learning
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Purchasing and Supply Chain Management
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