Calculate the annual holding costs of inventory

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Reference no: EM131657905

Aroma manufactures bread which is made out of flour. Every year 3 000 tones of flour is required. The cost of placing an order for flour is $200 and the cost of holding one ton of flour for one year is $42. The purchase price for one ton of flour is $20

1. Calculate the EOQ for flour assuming a 52 week period.

2. What will be the average frequency for purchase orders placed in weeks?

3. Calculate the annual ordering costs of inventory.

4. Calculate the annual holding costs of inventory.

5. Calculate the total annual cost of inventory.

Reference no: EM131657905

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