Joe Birra needs to purchase malt for his microbrewery production. His supplier charges $25 per delivery (no matter how much is delivered) and $1.25 per gallon. Joe's annual holding cost per unit is 25 percent of the price per gallon. Joe uses 200 gallons of malt per week.

a. Suppose Joe orders 750 gallons each time. What is his average inventory (in gallons)?
(Round your answer to 2 decimal places)

b. Suppose Joe orders 1250 gallons each time. How many orders does he place with his supplier each year?

c. How many gallons should Joe order from his supplier with each order to minimize the sum of the ordering and holding costs?
(Round your answer to 3 decimal places)

d. Suppose Joe orders 2500 gallons each time he places an order with the supplier. What is the sum of the ordering and holding costs per gallon?
(Round your answer to 2 decimal places)

e. Suppose Joe orders the quantity from part (c) that minimizes the sum of the ordering and holding costs each time he places an order with the supplier. What is the annual cost of the EOQ expressed as a percentage of the annual purchase cost?
(Round your answer to 2 decimal places)

1. If Joe's supplier only accepts orders that are an integer multiple of 1000 gallons, how much should Joe order to minimize ordering and holding costs per gallon?

2. Joe's supplier offers a 3.00 percent discount if Joe is willing to purchase 8000 gallons or more. What would Joe's total annual cost (purchasing, ordering, and holding) be if he were to take advantage of the discount?

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Bruno Fruscalzo decided to start a small production facility in Sydney to sell gelato to the local restaurants. His local milk supplier charges $0.50 per kg of milk plus a $25 delivery fee (the $25 fee is independent of the amount ordered). Bruno's holding cost is $0.02 per kg per month. He needs 10,000 kg of milk per month.

a. Suppose Bruno orders 8500 kg each time. What is his average inventory (in kg)?
(Round your answer to 1 decimal place)

b. Suppose Bruno orders 8000 kg each time. How many orders does he place with his supplier each year?

c. How many kg should Bruno order from his supplier with each order to minimize the sum of the ordering and holding costs?

d. If Bruno's storage vessel can hold only 3500 kg of milk, what would be Bruno's annual ordering and holding costs?

e. If Bruno's storage vessel can hold only 6000 kg of milk, what would be Bruno's annual ordering and holding costs?

1. Bruno's supplier's truck can carry 20,000 kg of milk. The supplier does not want to deliver to more than three customers with each truck. Thus, the supplier requires a minimum order quantity of 6500 kg. If Bruno orders the minimum amount, what would be the sum of his annual ordering and holding costs? Assume he has a storage vessel large enough to hold 6500 kg.
(Round your answer to 3 decimal places)

2. Bruno's supplier offers a 4 percent discount when a customer orders a full truck, which is 20,000 kg. Assume Bruno can store that quantity and the product will not spoil. If Bruno orders a full truck, what would be the inventory holding and ordering cost incurred per kg of milk?