Precision Engineering Factory Ltd consumes 50,000 units of a component per year. The ordering, receiving and handling cost are `3 per order while the trucking costs are `12 per order. Further details...

Precision Engineering Factory Ltd consumes 50,000 units of a component per year. The ordering, receiving and handling cost are `3 per order while the trucking costs are `12 per order. Further details are as follows: deterioration and obsolescence cost, `0.004 per unit per year; storage cost, `1,000 per year for 50,000 units. Interest cost is `0.06 per unit per year. Calculate the economic order quantity.