Problem
A service garage uses 15000 boxes of cleaning clothes a year. The ordering cost is $40 per box and the holding or carrying cost $150 per box per year.
1. Determine the economic order quantity?
2. What is the average number of bags arr-hand?
3. How many orders per year will there be?
4. Compute the total cost of ordering and carrying cost?
5. If ordering cost were to increase by $10 per year, how much would the minimum total annual cost?