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Economic Order Quantity

A company uses 240 boxes of typing paper each year. The company is trying to determine its optimal order quantity that will minimize its total inventory costs. Each time an order is placed, it costs the company approximately $24 in shipping, receiving and inspecting the goods upon arrival. Since storage space is at premium, the company estimates that it incurs a cost of $20 per box per year. What is the optimal Economic Order Quantity?
Select one:
a. 10000
b. 24
c. 100
d. 576
e. none of the above

Solution:

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