***SHOW ALL WORK

AAA Constructions, a large construction company located in New Jersey, purchases their needed cement from Camino, Inc., a multinational distributor of industrial products. Every bag of cement is purchased at $21 apiece, and the distributor charges an ordering cost of $125 per each order. The holding cost per bag of cement is estimated at 0.22 of the product value. AAA expects an annual order of 22000 bags.

a.) Assume the company follows an EOQ model to order their cement. What is the order quantity?

Note: Round up the order quantity to the next integer number as whole bags can be ordered only. Use this value for Q in all your subsequent calculations.

b.) What is the average inventory level?

Hint: Average inventory level is the average of the maximum and the minimum inventory levels over one ordering period.

Note: For Q, use the rounded up number you calculated in Problem 1. Report your answer at 2 decimal places.

c.) The gross weight of each bag of cement is 50 pounds. What is the gross weight of each order?

Note: For Q, use the rounded up number you calculated in Problem 1. Report your answer at 2 decimal places.

d.) How many times per year should AAA order the product to Camino?

Note: For Q, use the rounded up number you calculated in Problem 1. Report your answer at 2 decimal places.

e.)What is the annual ordering cost?

Note: Use the rounded up answer calculated in Question #4 (for the number of orders) instead of decimal values.

f.) What is the annual holding cost?

Note: For Q, use the rounded up number you calculated in Problem 1. Report your answer at 2 decimal places.

g.) Assume a motor carrier charges $5.50 per cwt (centum weight, that is, 100 lbs) to transport the cement bags from Caminos distribution center to AAA's warehouse. What is the annual transportation cost AAA have to pay the carrier?

Note: For Q, use the rounded up number you calculated in part a. Report your answer at 2 decimal places.

h.)What is the total logistics cost of ordering cement bags?

Hint: Total logistics cost consists of (i) annual ordering cost (ii) annual holding cost (iii) annual transportation cost.

Note: For Q, use the rounded up number you calculated in part a. Report your answer at 2 decimal places.