Question: Problem 2. (12 points) A produce distributor uses 2,560 packing crates a month, and each crate is purchased at a cost of $16. The manager

Problem 2. (12 points) A produce distributor uses 2,560 packing crates

Problem 2. (12 points) A produce distributor uses 2,560 packing crates a month, and each crate is purchased at a cost of $16. The manager has assigned an annual carrying cost of 25 percent of the purchase price per crate. The cost of placing an order is $240. Currently the manager orders once a month. a) What is the Economic Order Quantity (EOQ) for this product? (4 pts) b) How much could the firm save annually in total holding and ordering costs by ordering at the EOQ level? (8 pts) (Show the computations for the total holding and ordering costs in detail)

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