A letter to Mr. Lawrence Holder, owner of Snap fitness Gym regarding the issue.

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Discount-Mart (see Problem 16.8), as part of its newLean program, has signed a long-term contract with SpecialtyLighting and will place orders electronically for its halogen lamps.Ordering costs will drop to $.50 per order, but Discount-Mart alsoreassessed its carrying costs and raised them to $20 per lamp.a) What is the new economic order quantity?b) How many orders will now be placed?c) What is the total annual cost of managing the inventory withthis policy?

Answer 1

Question

Chapter 7, Problem 7.12AAC

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A letter to Mr. Lawrence Holder, owner of Snap fitness Gym regarding the issue.

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