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You have worked during the semester break for a pizza restaurant. You notice that the restaurant carries the most expensive ingredient, cheese, regularly in its

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You have worked during the semester break for a pizza restaurant. You notice that the restaurant carries the most expensive ingredient, cheese, regularly in its inventory. The owner orders replenishment every time when the stock level of cheese drops to 200 kg The supplier of cheese accepts a minimum order of 400 kg and takes 5 days to deliver after an order is placed. The price of cheese is $17.50 per kg. restaurant is open for 7 days a week for 50 weeks a year and consumes 14,000 kg per chase price to carry the stock of cheese. ou have proposed to the owner that the Economic Order Quantity Model be adopted in year. The owner estimates that it costs the business $40 to place an order and 10% of the anaging the inventory equired 1) Compute the total cost of ordering and canying the cheese under the current practice (5 marks Ifthe owner accepts your advice, compute the cost ofordering and carrying the cheese using the EOO (2)

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