Compute the total cost of lording and carrying flour

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Reference no: EM13891919

A large bakery buys flour in 25-pound bags. The bakery uses an average of 4,900 bags a year. Preparing an order and receiving a shipment of flour involves a cost of $10 per order. Annual carrying costs are $75 per bag.

1. Compute the total cost of lording and carrying flour. (Round your answer to 2 decimal places)

2. If holding costs were to increase by $9 per year, how much would that affect the minimum total annual cost? (Round intermediate order qty to nearest whole number and round your answer to 2 decimal places.)

Reference no: EM13891919

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