Pengaram Enterprise uses a large quantity of salt in its production process. Annual consumption is 60 000 tons over a 50-week working year. It costs $100 to initiate and process an order and delivery follows two weeks later. Storage costs for the salt in percentage are estimated at 1% per ton per year of the inventory value where the purchase price is $10.00 per ton.

Recommend an appropriate ordering policy for Pengaram Enterprise by calculating the economic ordering quantity (EOQ) and the optimal number of orders per year. (10 marks)