Question

A produce distributor uses 782 packing crates a month, which it purchases at a

cost of $10 each. The manager has assigned an annual carrying cost of 31 percent of the purchase price per crate. Ordering costs are $30. Currently the manager orders once a month.

How much could the firm save annually in ordering and carrying costs by using the EOQ? (Round intermediate calculations and final answer to 2 decimal places. Omit the “$” sign in your response.)

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