Unformatted text preview: The German University in Cairo (GUC) Spring 2012 Faculty of Management Technology Dr. Sherwat Elwan Operations Management Department OPER602 3. A large bakery buys flour in 25-pound bags. The bakery uses an average of 4,860 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. b. What is the average number of bags on hand? c. How many orders per year will there be? d. Compute the total cost of ordering and carrying flour. e. If ordering costs were to increase by $1 per order, how much would that affect the minimum total annual cost? 4. A large law firm uses an average of 40 boxes of copier paper a day. The firm operates 260 days a year. Storage and handling costs for the paper are $30 a year per box, and it costs approximately year....
View Full Document
- Spring '12
- Management, office manager, annual carrying costs, order size