ANNUAL DEMAND VEGGIE PIZZA PEPPERONI PIZZA CHEESE PIZZA 300000 250000 360000 PRODUCT 5' STRUCTURE RAW MATERIALS VEGGIE PIZZA PEPPERONI PIZZA FLOUR (gr) YEAST (gr) VEGETABLE OIL (mlt) UGAR (gr) CHEESE PIZZA KETCHUP SAUCE (mlt) CHEESE (gr) SWEET PEPPER ( GARLIC (gr) TOMATO (gr) MUSHROOM ( PEPPERONI (gr) I GO _' cm 2. 5 SALT (gr) 5 25 10 2D _ 5 25 25 :_a _a a ANNUAL Assume that we have 365 SHIPMENT COST per HOLDING COST days in a year PRICE per Kg each delivery per unit FLOUR 2 0.1 0.4 YEAST 20 0.12 4 VEGETABLE OIL 2.5 0.09 0.5 SUGAR 1 0.09 0.2 SALT 1 0.05 0.2 KETCHUP SAUCE 1.5 0.05 0.3 CHEESE 10 0.1 2 SWEET PEPPER 1 0.1 0.35 GARLIC 2.5 0.12 0.5 TOMATO 1 0.11 0.35 MUSHROOM 3 0.14 0.35 PEPPERONI 20 0.1 4 Formula EOQ SQRT ZSD/H Where 5: Set-up cost, D= Demand Rate, ROP Average Daily Sales X Days of Average Lead Time Demand during Shelf Life (Annual Demand X Shelf Life)/ 365 ( Note: 365 days Tutorial We cannot order more than cunsumption during the shelf life. Answer to part Answer to part A Answer to part B C Total demand during Annual Demand EOQ shelf Life EOQ Accepted Yes/ No 1. Calculate annual demand for each ingredient 2. Next calculate EOQ 3. Calculate demand during shelf life 4. Next determine EOQ accepted- Consider that EOQ calculated can not be more than demand If EOQ > Demand during shelf life- choose demand during shelf li If EOQ