Question
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 $872.10 per order,
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 $872.10 per order, and its carrying cost is $1.71 per pound per year. Calculate the firm's economic order quantity (EOQ) for the cheese. Mama Leone's operates 220 days per year and maintains a minimum inventory level of 2 days' worth of cheese. Assuming that the lead time to receive orders of cheese is 5 days, calculate the reorder point. The EOQ that minimizes the total inventory costs is _______ pounds of cheese. (Round to the nearest whole number.) The reorder point for Mama Leone's is _______ pounds of cheese. (Round to the nearest pound.)
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