A large bakery buys flour in 40-pound bags the bakery uses, Operation Management

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A large bakery buys flour in 40-pound bags the bakery uses

A large bakery buys flour in 40-pound bags. The bakery uses an average of 8,960 bags a year. Preparing an order and receiving a shipment of flour involves a cost of $20 per order. Annual carrying costs are $85 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?

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Operation Management: A large bakery buys flour in 40-pound bags the bakery uses

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Operation Management: A large bakery buys flour in 40-pound bags the bakery uses

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