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 $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.)

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

Foundations Of Financial Markets And Institutions

Authors: Frank J. Fabozzi, Franco Modigliani, Michael G. Ferri

2nd Edition

0136860567, 9780136860563

More Books

Students also viewed these Finance questions