A wholesaler has to supply his customer with 40,000 units of a given product every year; Assume that demand is fixed and known; Assume the cost of placing each order is Shs 2.00 while the holding cost per unit is Shs 1.00.
Required:
a. Determine the optimum order size using the EOQ model.(4 Marks)
b. Determine total costs incurred at optimum order size. (2 Marks)
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