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Alfredo s Pizza purchases its pizza delivery boxes from a printing supplier. Alfredo s delivers on average 2 2 5 pizzas each month. Boxes cost
Alfredos Pizza purchases its pizza delivery boxes from a printing supplier. Alfredos
delivers on average pizzas each month. Boxes cost cents each, and each order
costs ordering cost $ to process. Because of limited storage space, the manager
wants to charge inventory holding holding cost at percent of the cost of a box. The
lead time is days, and the restaurant is open days per year, assuming days per
month.
Calculate the following:
a Economic Order Quantity
b Expected number of orders Order Frequency
c Average inventory
d The annual holding cost.
e The annual ordering cost.
f The total annual cost of inventory management
g Reorder point
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