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5 . A large bakery buys flour in 2 5 kg bags. The bakery uses an average of 5 , 2 5 0 bags a
A large bakery buys flour in kg bags. The bakery uses an average of bags a year. Preparing an order, receiving the shipment,
and paying the invoice costs $ per order. Annual holding cost is $ per flour bag.
a Determine the economic order quantity. Round the final answer to the nearest whole number.
EOQ
b What is the average number of bags on hand ie average cycle inventory if EOQ is used? Round intermediate calculations.
Round the final answer to decimal place.
Average number of bags on hand
c How many orders per year will there be if EOQ is used? Round the final answer to the nearest whole number.
Orders per year
d Calculate the total annual cost of ordering and holding flour for EOQ Do not round intermediate calculations. Round the final
answer to decimal places.
Total annual cost $
e If ordering cost were to increase by percent per order, by what percentage would the EOQ change? Round intermediate
calculations. Round the final answer to the nearest whole number.
Percentage change
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