Fancy-Bike Manufacturing needs 100,000 units of bicycle tires for its production of beach bikes per...
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Accounting
Fancy-Bike Manufacturing needs 100,000 units of bicycle tires for its production of beach bikes per year. The carrying costs of these tires are $10 per unit per year and the fixed ordering cost is $400. What is the optimal number of units Fancy-Bike should order each time in order to minimize total inventory cost? At this optimal quantity, how often should Fancy-Bike order its bicycle tires? Assume a 365-day year.
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