The only thing that is not shown properly is the administrative ordering cost. It is $100 for each order.

. D E H 1 A L M N 1 Question 6. 2 3 You just took over purchasing for a fast food restaurant chain 4 At first glance it appears that your predecessor's approach to ordering cooking was last minute - when he was about to run out 6 You are buying for 10 restaurants open 24/7/365 7 The average restautant uses 2 gallons of oil per hour 8 9 The current supplier - a local wholesaler delivers on short notice and at the end of day 10 11 Your cost per gallon is $ 30.00 12 Your administrative ordering cost is M for each order 13 Your holding cost is 25% of the cost of the oil 15 Part 1 16 Under the current arrangement, what is the totaal annual inventory cost 17 18 Cast for each order 19 Ordering cost REMEMBER - YOU ARE ORDERING EVERY DAY 20 Holding cost 21 TC $ 22 23 24 Part 1 2 Another wholesaler approaches you with the following proposal 26 27 Weekly orders / deliveries of 3360 gallons (assume 52 weeks) 28 Cost per gallon $ 25.00 29 30 What is the total inventory cost in this scenario 31 32 Cost for each order 33 Ordering costs 34 Holding cost 35 TC $ 36 37 38 Part 1 39 You are intrigued by your findings, so you decide to open your operations management slides and determine your Optimal Order Quantity assuming a cost of $ 15 dollars per gallon 40 41 EOQ gallons round to the closest integer 42 number of orders/yr round to the closest integer 43 45 Part IV 46 What is your total inventory cost with the EOQ 48 Cost per order 49 Ordering cost so Holding costs 51 TC 52 $ . D E H 1 A L M N 1 Question 6. 2 3 You just took over purchasing for a fast food restaurant chain 4 At first glance it appears that your predecessor's approach to ordering cooking was last minute - when he was about to run out 6 You are buying for 10 restaurants open 24/7/365 7 The average restautant uses 2 gallons of oil per hour 8 9 The current supplier - a local wholesaler delivers on short notice and at the end of day 10 11 Your cost per gallon is $ 30.00 12 Your administrative ordering cost is M for each order 13 Your holding cost is 25% of the cost of the oil 15 Part 1 16 Under the current arrangement, what is the totaal annual inventory cost 17 18 Cast for each order 19 Ordering cost REMEMBER - YOU ARE ORDERING EVERY DAY 20 Holding cost 21 TC $ 22 23 24 Part 1 2 Another wholesaler approaches you with the following proposal 26 27 Weekly orders / deliveries of 3360 gallons (assume 52 weeks) 28 Cost per gallon $ 25.00 29 30 What is the total inventory cost in this scenario 31 32 Cost for each order 33 Ordering costs 34 Holding cost 35 TC $ 36 37 38 Part 1 39 You are intrigued by your findings, so you decide to open your operations management slides and determine your Optimal Order Quantity assuming a cost of $ 15 dollars per gallon 40 41 EOQ gallons round to the closest integer 42 number of orders/yr round to the closest integer 43 45 Part IV 46 What is your total inventory cost with the EOQ 48 Cost per order 49 Ordering cost so Holding costs 51 TC 52 $