Shirleys Home Made Cookies has an annual usage of 5,000 kg of chocolate chips, economic order quantity
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Shirley’s Home Made Cookies has an annual usage of 5,000 kg of chocolate chips, economic order quantity of 200 kg of chocolate chips, average usage of 25 kg per day, and a lead time of 3 days. Shirley’s only bakes cookies 4 days per week and needs to keep a safety stock of one day’s worth of chocolate chips. Determine the re-order point for chocolate chips.
Economic Order QuantityEconomic order quantity (EOQ) is the ideal order quantity a company should purchase to minimize inventory costs such as holding costs, shortage costs, and order costs. This production-scheduling model was developed in 1913 by Ford W. Harris and has...
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3rd Canadian edition
Authors: Leslie G. Eldenburg, Susan K. Wolcott, Liang Hsuan Chen, Gail Cook
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