Zartex Co. produces fertilizer to sell to wholesalers.  One raw material – calcium nitrate – is purchased from a nearby supplier at $22.50 per ton.  Zartex estimates it will need 5,750,000 tons of calcium nitrate next year.   The annual holding cost for this material is 40% of the acquisition cost, and the ordering cost is $595.  a) What is the most economical order quantity? b) How many orders will be placed per year?   c) How much time will elapse between orders

Current decision to buy: Ross White's machine shop uses 300 brackets each month during the course of a year.  This usage is relatively constant throughout the year.  Currently, these brackets are purchased from a supplier 100 miles away for $25 each and the lead time is 2 days. The holding cost per bracket per year is $3.75 (15% of the unit cost) and the annual ordering cost per order is $18.50. There are 240 working days per year. Possible future decision to make in-house: Ross White is reconsidering his decision of buying the brackets and is considering making the brackets in-house.  He has determined the set up costs would be $22.50 in machinist time and lost production time.  Forty eight brackets could be produced in a day once the machine has been set up.  Ross estimates that the cost (including labor and materials) of producing one bracket would be $22.85. The holding cost would be 12% of the cost. What is the EOQ given Ross' current decision to buy the brackets? What is the…

A components manufacturer uses approximately 20,000 units annually of an item. They are used at a steady rate during the 250 workdays that the plant operates. The cost of each item is $7.00, and the annual carrying cost is $0.50 per unit per year. The ordering cost is $50. What is the economic order quantity?

Mac-in-the-Box, Inc., sells computer equipment by mail andtelephone order. Mac sells 1,200 flat-bed scanners per year.Ordering cost is $300, and annual holding cost is 16 percentof the item’s price. The scanner manufacturer offers thefollowing price structure to Mac-in-the-Box: What order quantity minimizes total annual costs?