Yellow press, inc., buys paper in 1,500-pound rolls for printing. annual demand is 3 comma 000 3,000 rolls. the cost per roll is $ 875 875, and the annual holding cost is 20 20 percent of the cost. each order costs $ 75 75. a. how many rolls should yellow press order at a time?

59 orders

Explanation:

For computing the how many rolls should order at a time, first we have to determine the economic order quantity which is shown below:

The computation of the economic order quantity is shown below:

=

where,

Carrying cost = $875 × 20% = $175

And, other items values would remain the same

ow put these values to the above formula

So, the value would be equal to

=

= 50.71 units

Now The number of orders would be equal to

= Annual demand ÷ economic order quantity

= $3,000 ÷ 50.71 units

= 59 orders

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