PLEASE JUST ANSWER PART B

(Note: While this is a word problem, each of the situations reflects an inventory formula, or part of one, illustrated in your reading. It is important in your answer to each of the questions asked- that you identify either the formula or concept by name or formula. That is, If it an EOQ problem- then EOQ saying it is an EOQ formula is enough. But not all problems use the entire formula or use other concepts- so be sure to explain- or present your calculations. )

Part One:

Rick Jackson owns Billingtons Organic Bakery. One of the most important items to keep in inventory is a specialty organic flour from a Aime's Collective- a group of small organic farms south of Jacksonville, Florida. The flour is sold in bulk, and costs $1.25 per 20 pound bag. The flour can be delivered at any time from a regional warehouse and costs $35 per delivery. For his regular production cycle, Rick uses 250-20 pound bags per week. Since the flour is organic, it has a limited shelf life, and Rick estimates that his annual holding cost is thirty-five percent of his cost per bag.

Rick is working on understanding the dynamics of his inventory and order cycle and is considering the following elements:

1. How many bags should Rick order from his supplier in each order to minimize his total costs of ordering and holding costs?
2. Rick is currently ordering 1000 bags at a time, a thousand bags per order. At that rate, what is his average inventory (in bags) of flour?
3. Rick is considering ordering 1500 bags in each order, how many orders will he place each year?
4. Rick is also considering ordering 2500 bags each time he places an order. What would the total costs of ordering and holding costs per year at this rate per bag?
5. Given his answers to parts a-d, Rick realizes that his answer in part a is actually the calculation of the EOQ. At the rate from Part a- what are the total costs of inventory (holding and ordering for Ricks ordering of flour as a percentage of the annual purchase cost?
6. Since Ricks supplier only accepts order that are in thousand bag increments, how much should Rick order to minimize his total cost of bags.
7. Ricks supplier offers a 4 percent discount if Rick is willing to buy 8000 bags at a time, how many bags should he order to minimize his total costs.

Part b:

Just at Rick completed his calculations, his A/P assistant came in with the mail. In it was a letter from Aime's Collective noting that the price per bag has increased from $1.25 to $1.50 per bag. Explain in detail which calculations Rick would need to "re-do" in order to take into consideration this new price increase? Be clear which ones a, b, c, d, e, f, and/or g- and explain why. DO NOT CALCULATE!