An item sells for $25 a unit, but a 10% discount is offered for lots of 150 units or more. A company uses this item at the rate of 20 units per day. The setup cost for ordering a lot is $50, and the holding cost per unit per day is $.30. Should the company take advantage of the discount? Which of the two policies should the company adopt? (assume that there is no time between placing and receiving an order).
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