Question

Pixar Foods faces annual demand for Rice Krisp and Oat Crisp cereals of 480,000 and 840,000 boxes respectively. Each box contains 9 ounces of the respective grain (rice or oats and never both), and both grains are imported from India. Pixar Foods has computed its ordering cost as US\$60 per order. They pay their Indian supplier 12.5 US cents per pound (there are 16 ounces in a pound) of Rice and 10 cents per pound of Oats. The annual holding cost of either grain is 20% of the value of the grain. Answer the following questions based on the data above (choose the closest number). The optimum order quantity for rice in pounds is: 40K 38.8 K 36K 42.2 K Referring to the previous data on Pixar Foods: For the EOQ policy, the total annual cost (the sum of the holding and fixed order costs) for rice is (at the optimum order quantity): $750 $900 5810 $613 Weferring to the previous data on Pixar Foods: For the EOQ policy, the total annual cost (the sum of the holding and fixed order costs) for oats is:

1065
900
1210
1300
​Referring to the previous data on Pixar Foods: The number of times in a year we place orders for oats would be (as per the optimum order quantity): 7.5 5.7 3.1

Answer 1

The optimum order quantity for rice in pounds is 36K. The total annual cost for rice at the optimum order quantity is $900. The number of times in a year we place orders for oats would be 5.7.

Step-by-step explanation:

The optimum order quantity for rice in pounds is 36K. The EOQ policy total annual cost for rice at the optimum order quantity is $900. The EOQ policy total annual cost for oats is $900. The number of times in a year we place orders for oats would be 5.7.