Patty's Pancakes orders pancake mix once a week. The mix is used up by the end of
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Patty's Pancakes orders pancake mix once a week. The mix is used up by the end of the week, at which point more is reordered. Each time Patty orders pancake mix, she spends about a half hour of her time, which she estimates is worth $20. Patty sells 200 pounds of reconstituted pancake each week. The carrying cost of each pound of the mix is $.05 per week. Should Patty restock more or less frequently? What is the cost-minimizing order size? How many times per month should Patty restock?
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Related Book For
Fundamentals of Corporate Finance
ISBN: 978-1259024962
6th Canadian edition
Authors: Richard Brealey, Stewart Myers, Alan Marcus, Devashis Mitra, Elizabeth Maynes, William Lim
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