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5 . A large bakery buys flour in 2 5 kg bags. The bakery uses an average of 4 , 8 6 0 bags a
A large bakery buys flour in kg bags. The bakery uses an average of bags a year. Preparing an order, receiving shipment, and paying the invoice costs $ per order. Annual holding cost is $ per flour bag
a Determine the economic order quantity.
b What is the average number of bags on hand ie average cycle inventory if EOQ is used?
e How many orders per year will there be if EOQ is used?
d Calculate the total annual cost of ordering and holding flour for EOQ
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