estion lordu z #20: Module 10 Problems Question 126 PM AIA Inc. is looking to manage...

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Answer 1

Answer #1

EOQ = square root of (2* annual consumption*transaction cost/Interest rate)


Annual consumption	=6300*365	2299500
Transaction cost		210
Interest rate		2.90%


EOQ =		=square root of (22299500210/2.9%)

EOQ =		182491

Average cash balance = 182491/2		91,245.69



Number of transaction = 2299500/182491		12.60

Transaction cost = 12.6*210		2,646.12

Answer 2

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