University of Washington

For example, if the interest rate is 20%, we can estimate holding cost H as the interest for holding one unit (worth purchase price of $25) for a year as the cost of the working capital. As a result we will estimate the holding cost H as 20% of $25=$5 per unit per year. But how many units, on an average, are there in the book store’s inventory? That depends on the batch size decision ... ................
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