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Management Studies

This is a mail-order business for kitchen equipment. Annual demand for its best seller item is 25,000 units. This best seller item is sold at $350/unit, including shipping and handling. It has an earning markup of 20%. The annual holding cost per unit for this best seller is $5.50. The cost to process an order of this item is $25. It takes ten (10) days to completely process an order. Assume that the year has 360 days.

Question: Can you explain how the Actual Order Quantity (Q) is calculated? Your expert Jimmysiv has provided previous feedback but I have doubts regarding how he reached to Q=300. The EOO for this case is 477.

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Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M91644066

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