Question: 4) Using a computerized Ioventory Management System, an loe Cream Shop franchise continuously monitors the inventory of all the ice cream located at each of
4) Using a computerized Ioventory Management System, an loe Cream Shop franchise continuously monitors the inventory of all the ice cream located at each of their 15 stores and their distribution warchouse. The Ice Cream Shop franchise sells an average of 32 gallons of Vanilla lee Cream every week (for 52 weeks per year). They purehase Vanilla lee Cream from their supplier at a price of $2.00 per gallon. It takes 1.25 weeks to receive an order from the supplier. Administrative costs for ordering ice cream have been estimated to be \$IS per order. Holding Costs =20% of the purchase price per gallon per year, a. What is the most Economic Order Quantity? b. What is the optimal interval (in working days) between orders? c. What is the total annual cycle-inventory cost for the company's current policy? (asing EOQ as ordering lot sire)
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