Question: Sam's Cat Hotel operates 5 2 weeks per year, 6 days per week, and uses a continuous review inventory system. It purchases kitty litter for
Sam's Cat Hotel operates weeks per year, days per week, and uses a continuous review inventory system. It purchases kitty litter for $ per bag. The following information is available:
Demand bagsweek
Order Cost $order
Annual Holding Cost year
If their current order size is bags per order how much could they save annually by adopting an EOQ based inventory policy? Hint: Find the EOQ and then compare total cost
A Savings would be between $ and $
B Savings would be greater than $ but less than $
C Savings would be greater than $ but less than $
D Savings would be $ or greater
E There would be no savings
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