The optimal number of cans of paint the company should buy during each order is <u>604 cans</u>.
<h3>What is the optimal order quantity?</h3>
The optimal order quantity represents the economic order quantity.
The economic order quantity is the order quantity that minimizes total costs.
The economic order quantity can be computed using the EOQ model, which is equal to the square root of [2(setup costs)(demand rate)] / holding costs.
<h3>Data and Calculations:</h3>
Annual demand = 6,000
Ordering cost per order:
Fixed ordering cost = $150
Variable ordering cost = $2 per can
Holding cost = $5 per can
EOQ = square root of: [2(setup costs)(demand rate)] / holding costs.
= square root of (2 x $152 x 6,000)/$5
= square root of 364,800
= 604 cans
Thus, the optimal number of cans of paint the company should buy during each order is 604 cans.
Learn more about the economic order quantity at brainly.com/question/26814787
