The Always Fresh Grocery Store carries a particular brand of tea that has the following characteristics: Sales
Question:
Sales = 8 cases per week
Ordering cost = $10 per order
Carrying charge = 20 percent per year
Item cost = $80 per case
a. How many cases should be ordered at a time?
b. How often will tea be ordered?
c. What is the annual cost of ordering and carrying tea?
d. What factors might cause the firm to order a larger or smaller amount than the EOQ?
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Step by Step Answer:
a EOQ 2SD iC 210416280 228 23 cases b 238 28 so order every 28 ...View the full answer
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Related Book For 
Operations Management in the Supply Chain Decisions and Cases
ISBN: 978-0073525242
6th edition
Authors: Roger Schroeder, M. Johnny Rungtusanatham, Susan Goldstein
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