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Market demand for springs is 8,00,000 per annum. A company purchases these spring in lots and sells them. The cost of making a purchase order is Rs. 1,200. The cost of Storage of springs is Rs. 120 per stored piece per annum. The economic order quantity is
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- 400
- 2,828
- 4,000
- 8,000
Correct Option: C
D = 8,00,000 units/year
Co = 1200/Order
Ch = 120/unit/ year
Q* = 4000 units