A restaurant uses about 60,000 dozens of steaks per year, which it orders from a supplier. The steaks are used at a reasonably steady rate during the 240 working days per year. It costs $3.00 to keep one dozen of steaks in inventory for one month, and it costs $25.00 to place an order. A dozen of steaks cost $150.00 Required:
a. How many orders will be placed per year?
b. What is the total annual expense of ordering 600 dozen of steak every time?
c. How much is saved per year by ordering the EOQ?