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Question
A local lamp store expects to sell 2000 lamps in the coming year. It costs the store $1.00 in carrying costs for each lamp and $10.00 for each order placed.a. What is the economic order quantity for the lamps?
b. How many orders will be placed each year?
c. If the store wants a one-week safety stock and it takes one week to receive an order after it has been placed, what should the inventory level be when a new order is placed? Assume a 50-week year.
Answer
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