The Candy Shack has a monthly demand of 150 bags of Watermelon Slices. They pay $14.50 for each box of candy which contains 20 bags for sale. Their ordering costs are $50. Holding costs are negligible but they do pay 9% annually on the money they borrow to make such purchases.
What is the annual demand-in terms of boxes?
What is the materials costs-per bag?
What is the economic order quantity (EOQ)-in terms of bags?