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A firm’s quarterly demand rate is 250. If the firm optimal order quantity is 400 units, how many orders does the firm make per year on average? 2.5 0.8
Expert Answer
Given in the question :-
Let Demand rate be D.
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Question & Answer: A firm's quarterly demand rate is 250. If the firm optimal order quantity is 400 units, how many orders…
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Quaterly demand rate (D)=250
Thus yearly Demand Rate(D)= 250*4=1000
Also Given is Optimal Order Quantity = 400
The formula for Expected Number orders= N = Demand Rate/Optimal Order Quantity
Thus On Average the order the firm makes per year = 1000/400=2.5.
