Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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 225 pizzas each month. Boxes cost 43 cents each, and each order
costs (ordering cost) $12.50 to process. Because of limited storage space, the manager
wants to charge inventory holding (holding cost) at 25 percent of the cost of a box. The
lead time is 7 days, and the restaurant is open 360 days per year, assuming 30 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

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Pain Management Workbook

Authors: Rachel Zoffness, Mark A. Schumacher

1st Edition

1684036445, 978-1684036448

More Books

Students also viewed these General Management questions