6-1. Basic EOQ Question: The inventory manager of ABC, Ltd., wants to order flour for its bakery in a cost effective manner. The bakery uses an average of 12,000 bags a year. Preparing an order and receiving a shipment of flour involves a cost of $40 per order. Annual carrying costs are $37.50 per bag. REQUIRED: a. Determine the economic order quantity. b. What is the average number of bags on hand? c. How many orders will there be per year? d Compute the total cost of ordering and carrying flour per year. e. If ordering costs were to increase by $2 per order, how much would that affect the minimum annual total cost? Hint: Compute a new EOQ first.