The cost of carrying inventory is estimated at 15 per year


A supplier ships 100 units of a product every Monday. The purchase cost of product is Rs.60 per unit. The cost of ordering and transportation from the supplier is Rs.150 per order. The cost of carrying inventory is estimated at 15 % per year of the purchase cost. Find the lot-size that will minimize the cost of the system. Also determine the optimum cost.

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Operation Management: The cost of carrying inventory is estimated at 15 per year
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