er the next 12 months is E this item is 4, and ending riod and a setup cost of 5
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:A single inventory item is ordered from an outside supplier. The anticipated
demand for this item over the next 12 months is 6, 12, 4, 8, 15, 25, 20, 5, 10, 20, 5,
12. Current inventory of this item is 4, and ending inventory should be 8. Assume a
holding cost of $1 per period and a setup cost of $40. Determine the order policy
for this item based on
b. Least unit cost
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