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Problem:

The Western Jeans Company purchases denim from Cumberland Textile Mills. The Western Jeans Company uses 35,000 yards of denim per year to make jeans. The cost of ordering denim from the textile company is $500 per order. It costs Western $0.35 per yard annually to hold a yard of denim in inventory. Determine:

A. The optimal number of yards of denim the Western Jeans Company should order.

B. The minimum total annual inventory cost

C. The optimal number of orders per year and the optimal time between orders

Please provide step by step solution.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91146013

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