Sara’s Deli is famous for their delicious cupcakes and Sarapurchases the cupcakes from a local bakery. The demand for thecupcakes is 400 per month. A cupcake costs Sara $5 to purchase fromthe bakery, and the inventory holding cost is for Sara 15%. Sarahalso needs to pay a preparation cost of $20 per order. What is theoptimal order quantity for Sara’s? And what is the optimal orderfrequency?

Answer rating: 100% (QA)

The optimal order quantity can be determined using the EOQ formula EOQ 2DS... View the full answer