Identify the minimum cost order quantity, Operation Management

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Identify the minimum cost order quantity

Assignment:

Suppose that Westside Auto with D= 12,000 units per year, Cb= $0.50, and CO= $25, decided to operate with a backorder inventory policy. Backorder costs are estimated to be $5 per unit per year. Identify the following:

a) Minimum cost order quantity

b) Maximum number of backorders

c) Maximum inventory

d) Cycle time

e) Total annual cost

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