A restaurant buys flour in 30 pound bag. The restaurant uses an average an average of 5240
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Question:
A restaurant buys flour in 30 pound bag. The restaurant uses an average an average of 5240 bags a year. Preparing an order and receiving a shipment of flour involves a cost of $ 10 per order. Annual carring cost is $ 75 per bag.
(a) Determine the EOQ?
(b) What is the average number of bags on hand?
(c) How many orders per year will there be?
(d) Compute the total cost of ordering and carring flour.
(e) How much would that affect the minimum total annual cost if the ordering costs were to increase by $ 1 per order?
Related Book For
Business Law and the Legal Environment
ISBN: 978-1111530600
6th Edition
Authors: Jeffrey F. Beatty, Susan S. Samuelson, Dean A. Bredeson
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