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A large bakery buys flour in 25-pound bags. The bakery uses an average of 4200 bags a year. Preparing an order and receiving a shipment of flour involves a cost of $10.70 per order. Annual carrying costs are $76 per bag. Determine the EOQ. (Keep two decimal places in your answer)

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Tundexi

Answer:

34

Explanation:

Annual demand D = 4,200 bags

Ordering cost S = $10.70

Holding cost H = $76

Economic order quantity = [tex]\sqrt{2*D*S / H[/tex]

Economic order quantity = [tex]\sqrt{2*4200*$10.70 / $76}[/tex]

Economic order quantity = [tex]\sqrt{89880/76}[/tex]

Economic order quantity = [tex]\sqrt{1182.63}[/tex]

Economic order quantity = 34.389388

Economic order quantity = 34

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