Answered

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Sam’s Auto Shop services and repairs a particular brand of foreign automobile. Sam uses oil filters throughout the year. The shop operates fifty-two weeks per year and weekly demand is 156 filters. Sam estimates that it costs $18 to place an order and his annual holding cost rate is $3 per oil filter. Currently, Sam orders in quantities of 666 filters.

Calculate the total annual costs associated with Sam’s current ordering policy.

Sagot :

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