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7) Weedandfeed Corporation retails chemicals for homes. One of Weedandfeed's best selling pesticides is Pest-be-gone. The product is ordered from a wholesaler at a price of $600 per 100 pounds. 100,000 pounds of Pest-be-gone are estimated to be needed next year. Weedandfeed will use one of the following purchasing options for acquiring its product.
a) Based on this information and wanting to use the low cost strategy, what is the optimal order quantity that Weedandfeed should select for acquiring its Pest-be-gone next year? What is the lowest total cost for each of the two purchase options?
b) For the optimal order quantity selected in a) that provides the lowest total cost, determine the number of orders per year, time between orders, and the reorder point. There are 350 working days per year and the lead time is 5 days.
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