Sammy Sausages is a sausage processing business run by Samuel Smith. The sausages are made fresh every day and delivered to the fast food outlets the same day. The prime ingredient is premium quality minced beef. Each day 708 kilograms is used to produce 700 kilograms of sausages.

An administrative assistant who is paid an hourly rate of $28 does the order processing. She takes 45 minutes to process each order.

The minced meat is bought at a price of $4,000 per tonne. The cost of refrigerating the meat is $1 for every 10 kilos.

The meat may be refrigerated for 14 days as Sam wants to maintain a high standard and freshness with his products. He also tries to maintain a safety stock of 2 days.

The order lead-time is 1 day.

The company requires a 10% return on investment (ROI).

Sammy Sausage's calculated EOQ is 20.50 kilogram.

Q. 1.Advise Samuel on whether he should implement the calculated EOQ.