JUIJ TOI TNè data provided in worksheet C11P5 in the OM6 Data Workbook on the Co
ID: 353948 • Letter: J
Question
JUIJ TOI TNè data provided in worksheet C11P5 in the OM6 Data Workbook on the Course Mate Website. Clearly explain why you classified items as A, B, or C * MamaMia's Pizza purchases its pizza delivery boxes from a printing supplier. MamaMia's delivers on average 225 pizzas each month (assume deterministic demand). Boxes cost 43 cents each, and each order costs $12.50 to process. Because of limited storage the manager wants to charge inventory holding at 25percent of the cost. The lead time is 7 days, and the restaurant is open 360 days per year, assuming 30 days per month. Determine the economic order quantity, reorder point assuming no safety stock, number of orders per year, and total annual cost. 7.* Refer to the situation in problem 6. Suppose the manager of MamaMia's current order quantity is 400 boxes. How much can be saved by adopting an EOQ versus the current Q 400? 8 * Super K Beverage Company distributes a soft drink that has a constant annual demand rate of 4,600 cases. A 12-pack case of the soft drink costs Super K $2.25. Ordering costs are $20 per order, and inventory- holding costs are charged at 25 percent of the cost per unit. T here are 250 working days per year, and theExplanation / Answer
Monthly Demand, d = 225 Pizza
Daily Demand ,D = 225/30 Pizza
Ordering cost , S = $12.5 Per order
Cost of Item , C = $ 0.43 Per box
Inventory Holding Cost = 25% of Cost
Lead Time, LT = 7 days
EOQ, Economic Order Quantity = Sqrt(2DS/IC) = Sqrt(2*(225/30)*12.5/(0.25*0.43)) = 42 unit
Reorder Point = D*LT = (225/30)*7 = 52.5 = 53
Number of Order per year = Total Demand in year / EOQ = (225/30)*360/42 = 65 time
Annual Order Cost = Annual number of Order per year * Ordering cost = 65*12.5 = $808
Carrying Cost = IC*Q/2 *360= $ 808
Total Anual Cost = Annual Order cost + Carrying Cost + Cost of Boxes Order per year = 808+808+0.43*(225/30)*360 = $2777
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