Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Mama Leone's Frozen Pizzas uses 64.000 pounds of cheese per year. Each pound costs $5.50. The ordering cost for the cheese is $1283.80 per order,

image text in transcribed

Mama Leone's Frozen Pizzas uses 64.000 pounds of cheese per year. Each pound costs $5.50. The ordering cost for the cheese is $1283.80 per order, and its carrying cost is $2.62 per pound per year. Calculate the firm's economic order quantity (EOQ) for the cheese. Mama Leone's operates 240 days per year and maintains a minimum inventory level of 5 days' worth of cheese. Assuming that the lead time to receive orders of cheese is 2 days, calculate the reorder point. The EOQ that minimizes the total inventory costs is pounds of cheese. (Round to the nearest whole number.)

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_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

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

Get Started

Students also viewed these Finance questions