The Weighty Trash Bag Company has the following price schedule for its large trash can liners. For orders less than 500 bags, the company charges 30 cents per bag; for orders 500 or more but fewer than 1000 bags, it charges 29 cents per bag; and for orders of 1,000 or more it charges 28 cents per bag. First, compute annual demand, ordering cost, and holding cost.
a) How many large trash can liners should a company by from Weighty Trash in order to minimize its annual cost?
b) What is the total annual cost of ordering Q?