A sauce production facility sells the sauce in an adjoining store. Demand for the sauce is...
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A sauce production facility sells the sauce in an adjoining store. Demand for the sauce is 36 pints per day. Both the store and production facility operate 310 days per year. The company can produce 180 pints per day. It costs $685 to setup a production run. The sauce is stored at an annual cost of $17 per pint. The company wants to use the optimal order quantity. 3. What is the maximum inventory level? 4. How many production runs will be required each year? 5. What is the total annual carrying cost? 6. If the store places an order to the production facility for 1350 pints of sauce (not necessarily the economic order quantity), how many pints of sauce will be sold during the order receipt period? A sauce production facility sells the sauce in an adjoining store. Demand for the sauce is 36 pints per day. Both the store and production facility operate 310 days per year. The company can produce 180 pints per day. It costs $685 to setup a production run. The sauce is stored at an annual cost of $17 per pint. The company wants to use the optimal order quantity. 3. What is the maximum inventory level? 4. How many production runs will be required each year? 5. What is the total annual carrying cost? 6. If the store places an order to the production facility for 1350 pints of sauce (not necessarily the economic order quantity), how many pints of sauce will be sold during the order receipt period?
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Introduction In inventory management the Economic Order Quantity EOQ model is a fundamental tool used to optimize order quantities and minimize total ... View the full answer
Related Book For
Managerial Accounting Tools for Business Decision Making
ISBN: 978-1118033890
3rd Canadian edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso, Ibrahim M. Aly
Posted Date:
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