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Question: The cost of holding inventory for a product is about 16 cents per month. The annual demand for this product is about 150 units. The set-up cost is $145. The average order size for this product is about 30 units. The annual cost of tracking the inventory in MTS is about $1200. Under MTS. The back-ordering penalty is about $10 per order. Should this item be MTS or MTO?

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