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ann chovies, owner of the perfect pasta pizza parlor, uses 30 pounds of pepperoni each day in preparing pizzas. ann works only 100 days per year so she needs to buy a total of 3,000 pounds of pepperoni for the year. order costs for pepperoni are $100 per order, and carrying costs are $.25 per pound per year. ann has a hurdle rate of 12%, and the pepperoni that ann buys from her supplier costs $5 per pound. 7. What is the EOQ for pepperoni (rounded to the nearest whole number)?
a. 740 pounds.
b. 840 pounds.
c. 940 pounds.
d. 640 pounds.
8. What is the total relevant cost (ordering cost + carrying cost) for the year (rounded to the
nearest dollar) at an order size equal to 500 pounds?
a. $512
b. $712
c. $612
d. $812

Sagot :

The EOQ for pepperoni rounded to the nearest whole number is 940 pounds.

Economic Order Quantity, also known as Economic Purchase Quantity, is the order quantity that minimizes the total storage and ordering costs in inventory management. He is one of the oldest classic production planning models.

Economic Order Quantity (EOQ) is a calculation that describes the ideal order size for a business to meet demand without overspending. The inventory manager calculates her EOQ to minimize warehousing costs and excess inventory.

The EOQ formula is: EOQ = [(2 x Demand x Order Cost) / Inventory Cost] Square root of demand. According to the EOQ assumption, demand remains constant. Demand indicates how much inventory is consumed in a year or how many units are sold in a year.

Learn more about EOQ https://brainly.com/question/26814787

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