Question
A pizza parlor must decide how much flour to order each time they place an order. Their anmual demand for flour is 9000 pounds. The
A pizza parlor must decide how much flour to order each time they place an order. Their anmual demand for flour is 9000 pounds. The price of a pound of flour is $6. The annual holding cost of flour is $3 per pound. The pizza parlor incurs a flat ordering/delivery cost of $25 every time flour is ordered/delivered. The delivery lead time is 4 days. What is the pizza parlor's optimal/economic order quantity for flour?
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