Question
Joe Birra needs to purchase malt for his microbrewery production. His supplier charges $30 per delivery (no matter how much is delivered) and $1.15 per
Joe Birra needs to purchase malt for his microbrewery production. His supplier charges $30 per delivery (no matter how much is delivered) and $1.15 per gallon. Joes annual holding cost per unit is 35 percent of the price per gallon. Joe uses 300 gallons of malt per week.
C.) Answer is 1525
e.) Suppose Joe orders the quantity from part (c) that minimizes the sum of the ordering and holding costs each time he places an order with the supplier. What is the annual cost of the EOQ expressed as a percentage of the annual purchase cost? Note: Round your answer to 2 decimal places.
F.) If Joes supplier only accepts orders that are an integer multiple of 1000 gallons, how much should Joe order to minimize ordering and holding costs per gallon?
G.) Joes supplier offers a 3.00 percent discount if Joe is willing to purchase 8000 gallons or more. What would Joes total annual cost (purchasing, ordering, and holding) be if he were to take advantage of the discount?
Please answer soon
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