3. A bakery buys flour in 25-pound bags. The bakery uses 1,215 bags a year. Ordering cost is $10 per order. Annual carrying cost is $75 per bag. a. Determine the economic order quantity. b. What is the average number of bags on hand? c. How many orders per year will there be? d. Compute the total cost of ordering and carrying flour. e. If holding costs were to increase by $9 per year, how much would that affect the minimum total annual cost?
3. A bakery buys flour in 25-pound bags. The bakery uses 1,215 bags a year. Ordering cost is $10 per order. Annual carrying cost is $75 per bag. a. Determine the economic order quantity. b. What is the average number of bags on hand? c. How many orders per year will there be? d. Compute the total cost of ordering and carrying flour. e. If holding costs were to increase by $9 per year, how much would that affect the minimum total annual cost?
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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please help, need to see work and answers in excel only

Transcribed Image Text:3. A bakery buys flour in 25-pound bags. The bakery uses 1,215 bags a year. Ordering cost is $10 per
order. Annual carrying cost is $75 per bag.
a. Determine the economic order quantity.
b. What is the average number of bags on hand?
c. How many orders per year will there be?
d. Compute the total cost of ordering and carrying flour.
e. If holding costs were to increase by $9 per year, how much would that affect the minimum total
annual cost?
Expert Solution

Step 1
EOQ is the quantity at which both ordering cost and holding cost becomes equal and the quantity helps to minimize the total annual cost of inventory |
Step by step
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