Cat Lovers Inc. (CLI) is the distributor of a very popular blend of cat food that sells for $1.25 per can. CLI experiences demand of 500 cans per week on average. They order the cans of cat food from the Nutritious & Delicious Co. (N&D). N&D sells cans to CLI at $0.50 per can and charges a flat fee of $7 per order for shipping and handling. CLI uses the economic order quantity as their fixed order size. Assume that the opportunity cost of capital and all other inventory cost is 15 percent annually and that there are 50 weeks in a year.
a. How many cans of cat food should CLI order at a time?
b. What is CLI's total order cost for one year?
c. What is CLI's total holding cost for one year?
d. What is CLI's weekly inventory turns?

  • CreatedMarch 31, 2015
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