Problem 12-3 (Static) A large bakery buys flour In 25-pound bags. The bakery uses an average of 1,215 bags a year. Preparing an order and receiving a shipment of flour Involves a cost of $10 per order. Annual carrying costs are $75 per bag. a. Determine the economic order quantity. (Round your final answer to the nearest whole number.) Economic order quantity b. What is the average number of bags on hand? (Round your final answer to the nearest whole number.) Average number of bags c. How many orders per year will there be? (Round your final answer to the nearest whole number.) Number of orders per year bags d. Compute the total cost of ordering and carrying flour. (Round your final answer to the nearest whole number.) Total cost e. If annual holding costs were to Increase by $9 per bag, how much would that affect the minimum total annual cost? (Round your Intermediate calculations to 2 decimal places and final answer to 2 decimal places.) Increase by

Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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# Problem 12-3 (Static)

A large bakery buys flour in 25-pound bags. The bakery uses an average of 1,215 bags a year. Preparing an order and receiving a shipment of flour involves a cost of $10 per order. Annual carrying costs are $7.5 per bag.

### a. Determine the economic order quantity. 
*(Round your final answer to the nearest whole number.)*

- **Economic order quantity:** [Input Box] bags

### b. What is the average number of bags on hand?
*(Round your final answer to the nearest whole number.)*

- **Average number of bags:** [Input Box]

### c. How many orders per year will there be?
*(Round your final answer to the nearest whole number.)*

- **Number of orders per year:** [Input Box]

### d. Compute the total cost of ordering and carrying flour.
*(Round your final answer to the nearest whole number.)*

- **Total cost:** [Input Box]

### e. If annual holding costs were to increase by $9 per bag, how much would that affect the minimum total annual cost? 
*(Round your intermediate calculations to 2 decimal places and final answer to 2 decimal places.)*

- **Increase by:** [Input Box]
Transcribed Image Text:# Problem 12-3 (Static) A large bakery buys flour in 25-pound bags. The bakery uses an average of 1,215 bags a year. Preparing an order and receiving a shipment of flour involves a cost of $10 per order. Annual carrying costs are $7.5 per bag. ### a. Determine the economic order quantity. *(Round your final answer to the nearest whole number.)* - **Economic order quantity:** [Input Box] bags ### b. What is the average number of bags on hand? *(Round your final answer to the nearest whole number.)* - **Average number of bags:** [Input Box] ### c. How many orders per year will there be? *(Round your final answer to the nearest whole number.)* - **Number of orders per year:** [Input Box] ### d. Compute the total cost of ordering and carrying flour. *(Round your final answer to the nearest whole number.)* - **Total cost:** [Input Box] ### e. If annual holding costs were to increase by $9 per bag, how much would that affect the minimum total annual cost? *(Round your intermediate calculations to 2 decimal places and final answer to 2 decimal places.)* - **Increase by:** [Input Box]
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