Problem $12-6($Algo$)$ rev

A produce distributor uses $775$ packing crates a month, which it purchases at a cost of $$8$ each. The manager has assigned an annual carrying cost of $35$ percent of the purchase price per crate. Ordering costs are $$30.$

Currently the manager orders once a month, and orders $775$ packing crates, that is$,$ the current order quantity equals the monthly demand.

How much could the firm save annually in ordering and carrying costs by using the EOQ? $($Round all intermedlate caiculations Including EOQ, and final answer, to $2$ decimal places.$)$

Tip: Cllck the "Hint" link on the left to watch a video walk$-$through of a similar problem with different numbers. In order to solve this problem, you must first determine the total cost of the current inventory policy. Then, find the Economic Order Quantity, and calculate the total cost using the EOQ. Finally, calculate the savings from using the EOQ as an order quantity.

Savings

per year