Business, 07.04.2020 04:28 imamnaab46

A large bakery buys flour in 25-pound bags. The bakery uses an average of 4,860 bags a year. Preparing an order and receiving a shipment of flour involves a cost of $4 per order. Annual carrying cost are $30 per bag. Assume that each order comes in one batch.
(a) Determine the economic order quantity.
(b) What is the average inventory level?
(c) How many orders does de company place per year?
(d) Demonstrate that your order quantity in (a) is optimal by showing that annual ordering costs = annual holding costs.

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A large bakery buys flour in 25-pound bags. The bakery uses an average of 4,860 bags a year. Prepari...

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