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ABC Aircraft employs 2,000 drill bits yearly. Each drill bit costs $50 and each order ABC places costs $30. The yearly carrying rate is 20% of unit cost. ABC has contracted with supplier of drill bits to employ an order quantity of 200 by doing which they get a 3% discount on purchase price. Evaluate the annual total cost (i.e. the Purchase cost + ordering cost + Holding cost). (Please read the problem more than once)

Project Management, Management Studies

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