Determine the economic order quantity

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Reference no: EM132262650

A large bakery buys flour in 20-pound bags. The bakery uses an average of 1400 bags a year. Preparing an order and receiving a shipment of flour involves a cost of $40 per order. Annual Carrying costs are $ 30 per bag. PLEASE SHOW WORK.

Determine the economic order quantity?

What is the average number of bags on-hand?

How many orders per year will there be?

Compute the total cost of ordering and carrying flour?

If holding costs were to increase by $5 per year, how much would the minimum total annual cost?

Reference no: EM132262650

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