Item X is a standard item stocked in a company's inventory of component parts. Each...
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Accounting
Item X is a standard item stocked in a company's inventory of component parts. Each year the firm, on a random basis, uses about 2.400 of item X, which costs $25 each. Storage costs, which include insurance and cost of capital, amount to S4 per unit of average inventory. Every time an order is placed for more item X, it costs $18. Calculate the order quantity and the annual ordering cost for item x
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