Ann Chovies, owner of the Perfect Pasta Pizza Parlor, uses 20 pounds of pepperon

Question

Ann Chovies, owner of the Perfect Pasta Pizza Parlor, uses 20 pounds of pepperoni each day in preparing pizzas. Order costs for and carrying costs are 4 cents per pound per day. Lead time for each order is three days, and the pepperoni itself costs $3.00 per pound. If she were to order 80 pounds of pepperoni at a time, what would be the length of an order cycle? O o days pepperoni are $10.00 per order 0.25 days 3 days O 4 days O 5 days QUESTION 3 Which one of the following is implied by a lead time service level of 95 percent? Approximately 95 percent of demand during lead time will be satisfied. O Approximately 95 percent of inventory will be used during lead time. O The probability ts 95 that demand during lead time will exactly equal the amount on hand at the beginning of lead time. O The probability is 95 that demand during lead time will O The probability is 95 that the order w arrive after the on-hand inventory is exhausted. not exceed the amount on hand at the beginning of lead time

Explanation / Answer

Question 2

To be calculated:

Length of order cycle

Given values:

Daily demand, d = 20 pounds

Order costs, Co = $10.00 per order

Carrying costs, Cc = $0.04

Lead time, L = 3 days

Pepperoni costs, C = $3.00 per pound

Order quantity, Qo = 80 pounds

Solution:

Length of order cycle is calculated as;

Length of order cycle = Qo / d

Putting the given values in the above formula, we get;

Length of order cycle = 80 / 20

Answer: Option (D) - Length of order cycle = 4 days

Question 3

Answer: Option (D) - The probability is .95 that demand during lead time will not exceed the amount on hand at the beginning of lead time.

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