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A bakery uses high amount of flour at a steady rate to make its products. It orders flour from a supplier, and uses EOQ (economic
A bakery uses high amount of flour at a steady rate to make its products. It orders flour from a supplier, and uses EOQ (economic order quantity) model to determine the size of its order. It recently launched new lines of cakes, as a result of which its consumption rate of flour doubled. Peter, who manages the deliveries suggests that they should double their order quantity in response to this change, but keep ordering with the same frequency. John, who manages inventory disagrees. He suggests they should keep their order quantity unchanged, but double the order frequency. Whose suggestion will result in lower cost? Group of answer choices John's suggestion Peter's suggestion Both will have same cost
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