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San Diego State University Operations And Supply Chain Management Assignment Help - Economic order quantity


Question - Smithson hydraulics inc carries an inventory of valves that cost $25 each. The firm's inventory
carrying costs is approximately 18% of the value of the inventory. It cost $38 to place, process, and
receive an order. The firm uses 20,000 valves a year. a) What ordering quantity minimizes the
inventory costs associated with the valves? Round to the nearest unit. b) How many orders will be
placed each year if the EOQ is used? c) What are the valves carrying and ordering costs if the EOQ is
used?

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