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The injection molding department of Alver Inc. uses an average of 40 pounds of a special powder per day. The plant operates 250 days per year. The daily usage of the powder is normally distributed with a standard deviation of 5 pounds per day. The lead time to obtain the powder from a supplier is 9 days. The annual holding cost is $2 per unit and the cost of ordering the powder is $50.
-How many units should Alver Inc. order in order to minimize annual ordering and carrying cost?
Company
An organized entity formed for the purpose of conducting business, which may involve selling goods or services.
IPO
Initial Public Offering, the process by which a private company becomes publicly traded by offering its shares to the public for the first time.
Open Market
A system or environment where goods, services, and financial instruments are traded freely between participants without significant restrictions.
Return of Cash
The process of distributing cash to shareholders, usually in the form of dividends or the repurchase of shares, representing a return on their investment.
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