Question 1: A contractor has a requirement for cement in the amount of 45,000 bags per year. Cement costs $2.85 per bag, and it costs $40 to process a purchase order. Holding cost is $4 per bag per year because of the high rate of spoilage. Find the minimum-cost-purchase quantity.
Question 2: A foundry uses 3,600 tons of pig iron per year at a constant rate. The cost per ton elivered to the foundry is $145. It costs $92 to place an order and $18 per ton per year for storage. Find the minimum-cost purchase quantity.
Question 3: The demand for 1,000 units of a part to be used at a uniform rate throughout the year may be met by manufacturing. The part can be produced at the rate of 3 per hour in a department that works 1,880 hours per year. The set-up cost per lot is estimated to be $40, and the manufacturing cost has been established at $5.20 per unit. Interest, insurance, taxes, space, and other holding costs are $3.10 per unit per year. Calculate the economic manufacturing quantity.