BZoom sells toy bricks that can be used to construct a wide range of machines, animals, buildings, and so on. It purchases a red dye powder to include in the resin it uses to make the bricks. The powder is purchased from a supplier for $1.3 per kilogram. At one production facility, BZoom requires 400 kilograms of this red dye powder each week. BZooms annual holding costs are 30 percent and the fixed cost associated with each order to the supplier is $50.

1. How many kilograms should BZoom order from its supplier with each order to minimize the sum of the ordering and holding costs?

2. If BZoom orders 4,000 kilograms at a time, what would be the sum of the annual ordering and holding costs?

3. If BZoom orders 2,000 kilograms at a time, what would be the sum of the ordering and holding costs per kilogram of dye?

   Note: Round your answer to 3 decimal places.

4. If BZoom orders the quantity from part (a) that minimizes the sum of the ordering and holding costs, what is the annual cost of the EOQ expressed as a percentage of the annual purchase cost?

   Note: Round your answer to 2 decimal places.

5. BZooms purchasing manager negotiated with its supplier to get a 2.5 percent discount on orders of 10,000 kilograms or greater. What would be the change in BZooms annual total cost (purchasing, ordering, and holding) if it took advantage of this deal instead of ordering smaller quantities at the full price?
   multiple choice

   • It would decrease by more than $1,000.

   • It would decrease by less than $1,000.

   • It would increase by less than $1,000.

   • It would increase by more than $1,000.