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A company purchases cases of fertilizer for its lawn-care business from a supplier who charges C&A $30 per order and $45 per case. Each case consists of five bags of fertilizer. The company needs 1700 bags of fertilizer a year. Annual holding costs are 31%. Respond to the following questions. (Use 2 decimals)
a. How many cases of fertilizer should the compay order from its supplier with each order to minimize the total ordering and holding cost?
b. How many orders does the company places per year ?
c. What is the company's average inventory ?
d. if the order quantity is 50 cases , how many orders does the company places per year ?
e. If the order quantity is 200 cases, what is the company's average inventory?
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An analysis of the holding costs, including the appropriate annual holding cost rate.
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Develop a report for Figi Fabricating that will address the question of whether the company should continue to purchase the part from the supplier or begin to produce the part itself.
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