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# Chapter 76. The Economic Order Quantity Inventory Model

• An electronics store sells 10,000 cell phones per year. Each time an order is placed for a supply of cell phones, the store incurs an order cost of \$10. The store pays \$100 for each cell phone, and the cost of holding a cell phone in inventory for a year is assumed to be \$20. When the store orders cell phones, how large an order should it make?

• A computer manufacturing plant produces 10,000 servers per year. The cost to produce each server is \$2,000. The cost to set up a production run of servers is \$200, and the cost to hold a server in inventory for a year is \$500. The plant can produce 25,000 servers per year if it wants to. When the plant produces servers, ...

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