Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Alfred operates a factory that manufactures bread and cakes. One of the major raw materials used is organic maize, which he buys for $5 per
Alfred operates a factory that manufactures bread and cakes. One of the major raw materials used is organic maize, which he buys for $5 per kilogram. The factory operates for 350 days each year. The following information has been provided:
Annual usage of maize
80 000 kilograms
Average time between placing and receiving order
4 days
Estimated cost of ordering and receiving inventory (per order)
$8
Estimated annual cost of carrying a kilogram of maize in stock
$0.50
(a)economic order quantity (EOQ) (7 marks)
(b)number of orders per year. (3 marks)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started