There are two questions in this assignment. Each question is worth 10 points adding to 20 points.

1. A large bakery buys flour in 20-pound bags. The bakery uses an average of 1450 bags a year. Preparing an order and receiving a shipment of flour involves a cost of $25 per order. Annual Carrying costs are $ 58 per bag.

1. Determine the economic order quantity?
2. What is the average number of bags on-hand?
3. How many orders per year will there be?
4. Compute the total cost of ordering and carrying flour?
5. If holding costs were to increase by $5 per year, how much would the minimum total annual cost?

2. The maintenance department of a large hospital uses about 820 cases of liquid cleanser annually. Ordering costs are $7, carrying costs are $12 per case a year, and the new price schedule is given in table below. Determine the optimal order quantity and the total cost.

Range	Price
1 to 49	$30
50 to 79	$28
80 to 99	$26
100 or more	$24