Question
Island Dairies are the main manufacturers of the famous Tastee Cheese products. The dairy manufacturer sells 15000 tins of cheese per month each tin of
Island Dairies are the main manufacturers of the famous Tastee Cheese products. The dairy manufacturer sells 15000 tins of cheese per month each tin of cheese costs $560, while the estimated annual demand for the cheese is 180,000 tins. The annual carrying cost of each tin of cheese is 30% of the cost for each tin of cheese. However, each order of liquefied milk preservatives (gallons) the company makes costs $465; which includes documentation and delivery expenses. The order lead time 12 is days and the company operates 365 days for a year. The company's milk preservatives are produced by Barco Chemicals. Task: 1. Calculate the Economic Order Quantity of milk preservatives needed per month?
2. Calculate the Re-Order point?
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