ANNUAL DEMAND

VEGGIE PIZZA PEPPERONI PIZZA CHEESE PIZZA

$300000250000360000$

PRODUCTS' STRUCTURE

RAW MATERIALS VEGGIE PIZZA PEPPERONI PIZZA CHEESE PIZZA

FLOUR $($gr$)252525$

YEAST $($gr$)555$

VEGETABLE OIL $($mlt$)555$

SUGAR $($gr$)222$

SALT $($gr$)555$

KETCHUP SAUCE $($mlt$)252525$

CHEESE $($gr$)303040$

SWEET PEPPER $($gr$)1000$

GARLIC $($gr$)1000$

TOMATO $($gr$)2000$

MUSHROOM $($gr$)2050$

PEPPERONI $($gr$)0200$

Assume that we have $365$ days in a year PRICE per Kg SHIPMENT COST per each delivery ANNUAL HOLDING COST per unit LEAD TIME $($days$)$ Shelf Life

FLOUR $20\mathrm{.}10\mathrm{.}47100$

YEAST $200\mathrm{.}124740$

VEGETABLE OIL $2\mathrm{.}50\mathrm{.}090\mathrm{.}510120$

SUGAR $10\mathrm{.}090\mathrm{.}210200$

SALT $10\mathrm{.}050\mathrm{.}215120$

KETCHUP SAUCE $1\mathrm{.}50\mathrm{.}050\mathrm{.}32040$

CHEESE $100\mathrm{.}1227$

SWEET PEPPER $10\mathrm{.}10\mathrm{.}3513$

GARLIC $2\mathrm{.}50\mathrm{.}120\mathrm{.}5120$

TOMATO $10\mathrm{.}110\mathrm{.}3513$

MUSHROOM $30\mathrm{.}140\mathrm{.}3513$

PEPPERONI $200\mathrm{.}14310$

Formula

EOQ SQRT $2$SD$/$H Where S$=$ Set$-$up cost$,$ D$=$ Demand Rate, H$=$ Holding cost

ROP Average Daily Sales X Days of Average Lead Time

Demand during Shelf Life $($Annual Demand X Shelf Life$)/365($ Note: $365$ days in a year$)$

Tutorial

We cannot order more than cunsumption during the shelf life.

Answer to part A Answer to part B Answer to part C Answer to part D

Annual Demand EOQ Total demand during shelf Life EOQ Accepted Proper Order Size ROP Level

Yes$/$ No

$1.$ Calculate annual demand for each ingredient

$2.$ Next calculate EOQ

$3.$ Calculate demand during shelf life

$4.$ Next determine EOQ accepted$-$ Consider that EOQ calculated can not be more than demand during shelf life

If EOQ $>$ Demand during shelf life$-$ choose demand during shelf life as accepted$-$ Enter this amount in 'Proper Order Size' column

If EOQ $$ Demand during shelf life$-$ choose EOQ as accepted$-$ Enter this amount in ;Proper Order Size' column

$5.$ Calculate ROP level