AAA Constructions, a large construction company located in New Jersey, purchases their needed cement from Camino, Inc., a multinational distributor of industrial products. Every bag of cement is purchased at $20 apiece, and the distributor charges an ordering cost of $50 per each order. The holding cost per bag of cement is estimated at 0.15 of the product value. AAA expects an annual order of 9000 bags.

1) Assume the company follows an EOQ model to order their cement. What is the order quantity? (round to next interger)

2) What is the average inventory level? (Note: For Q, use the rounded up number you calculated in Problem 1.)

3) The gross weight of each bag of cement is 50 pounds. What is the gross weight of each order? (Note: For Q, use the rounded up number you calculated in Problem 1.)

4) How many times per year should AAA order the product to Camino? (Note: For Q, use the rounded up number you calculated in Problem 1.)

5) What is the annual ordering cost? (Note: Use the rounded up answer calculated in Question #4)

6) What is the annual holding cost? (Note: For Q, use the rounded up number you calculated in Problem 1. )

7) Assume a motor carrier charges $5.50 per cwt (centum weight, that is, 100 lbs) to transport the cement bags from Caminos distribution center to AAA's warehouse. What is the annual transportation cost AAA have to pay the carrier? (Note: For Q, use the rounded up number you calculated in Problem 1. )

8) What is the total logistics cost of ordering cement bags? (Note: For Q, use the rounded up number you calculated in Problem 1. )