Question: FCC Cafeteria, which is a fast lunch spot in ankaya University campus, purchases several basic cooking ingredients from a supplier. The annual usage ( demand
FCC Cafeteria, which is a fast lunch spot in ankaya University campus,
purchases several basic cooking ingredients from a supplier. The annual usage demand purchasing cost,
and setup order cost of these ingredients are given in the table below. The inventory carrying rate is
per unit per year.
Ingredient A B C
Annual Demand in units
Setup Cost $ order
Purchasing Cost $ unit
a Assume that all ingredients are ordered independently. What is the total inventory carrying cost of all
ingredients when all ingredients are optimally ordered?
b The cafeteria management wants to order all ingredients in each cycle,
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