Determination of the economic order quantity

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A large bakery buys flour in 25-pound bags. The bakery uses an average of 4,500 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.
a. Determine the economic order quantity. (Do not round intermediate calculations. Round your final answer to the nearest whole number.) Economic order quantity bags=35
b. What is the average number of bags on hand?(Round your answer to the nearest whole number.) Average number of bags=18
c. How many orders per year will there be? (Round your final answer to the nearest whole number.) Number of orders per year=129
d. Compute the total cost of ordering and carrying flour. (Round your answer to 2 decimal places. Omit the "tiny_mce_markerquot; sign in your response.) Total cost $=2598.21
e. If holding costs were to increase by $9 per year, how much would that affect the minimum total annual cost? (Round your answer to 2 decimal places. Omit the "tiny_mce_markerquot; sign in your response.) Increase by $=

Reference no: EM13105352

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