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# Sarah’s Organic Soap Company makes organic liquid soap. One of the raw materials for her

Question: Sarah’s Organic Soap Company makes organic liquid soap. One of the raw materials for her soaps is organic palm oil. She needs 900 kilogram of palm oil per day on average. The supplier charges a \$54 delivery fee per order (which is independent of the order size) and \$6.00 per kilogram. Sarah’s annual holding cost is 15 percent. Assume she operates and sellsSee the answerSee the answerSee the answer done loadingSarah’s Organic Soap Company makes organic liquid soap. One of the raw materials for her soaps is organic palm oil. She needs 900 kilogram of palm oil per day on average. The supplier charges a \$54 delivery fee per order (which is independent of the order size) and \$6.00 per kilogram. Sarah’s annual holding cost is 15 percent. Assume she operates and sells five days per week, 52 weeks per year.
If Sarah wants to minimize her annual ordering and inventory holding costs, how much palm oil should she purchase with each order (in kilogram)?

If Sarah orders 3,750 kilogram with each order, what would be the annual sum of the ordering and holding costs? Note: Do not round intermediate calculations.

If Sarah orders 8,400 kilogram with each order, what would be the sum of the ordering and holding costs per kilogram sold? Note: Round your answer to 3 decimal places.

Sarah’s supplier is willing to sell her palm oil at a 5 percent discount if she purchases 15,000 kilogram at a time. If she were to purchase 15,000 kilogram per order, what would be her annual sum of the ordering and holding costs? Note: Do not round intermediate calculations. Round your answer to the nearest whole dollar amount.