Jake Fleming sells distributor rebuild kits used on old Ford V-8 engines. Jake purchases these kits for $20 and sells about 250 kits a year. Each time Jake places an order, it costs him $25 to cover shipping and paperwork. Jake figures that the cost of holding a rebuild kit in inventory is about $3.50 per kit per year. What is the economic order quantity? How many times per year will Jake place an order? How much will it cost Jake to order and hold these kits each year?
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