Simply Steak recently expanded its menu at their premier Miami location by offering the new Steak...

 

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Simply Steak recently expanded its menu at their premier Miami location by offering the new "Steak Valetta". The new addition requires a special spice rub made by mixing rosemary, salt, sage, lemon, fennel, garlic, marjoram and a secret ingredient. Simply Steak uses 147.690z of the spice rub during a typical week. The rub is purchased from SpiceSource in Evanston, IL. SpiceSource sells 1.5oz spice shaker iars for $3.60 or 10lb re-sealable spice bags for $288 each. [Note that 1oz = 0.0625lb]. Based on the storage complexities involved in keeping the spice rub fresh, the holding cost per ounce for one year has been determined to be 24% of the cost price. The cost of ordering is quite low, at $2.88 per order, and safety stock is equal to 2 days of demand. Simply Steak is open 6 days a week throughout the year. a) Ignoring the cost of transportation from Evanston, what is the total annual cost of Simply Steak's inventory policy? Weight (lbs) 10 15 20 25 26 27 28 29 30 Shipping Cost ($) 2-day 62.97 Overnight 106.09 135.36 158.23 180.44 188.91 192.94 197.72 201.45 201.65 87.15 106.24 125.99 130.22 134.65 138.13 141.81 145.68 3-day 15.70 19.44 23.99 28.97 30.03 31.03 32.01 32.92 33.95 Simply Steak recently expanded its menu at their premier Miami location by offering the new "Steak Valetta". The new addition requires a special spice rub made by mixing rosemary, salt, sage, lemon, fennel, garlic, marjoram and a secret ingredient. Simply Steak uses 147.690z of the spice rub during a typical week. The rub is purchased from SpiceSource in Evanston, IL. SpiceSource sells 1.5oz spice shaker iars for $3.60 or 10lb re-sealable spice bags for $288 each. [Note that 1oz = 0.0625lb]. Based on the storage complexities involved in keeping the spice rub fresh, the holding cost per ounce for one year has been determined to be 24% of the cost price. The cost of ordering is quite low, at $2.88 per order, and safety stock is equal to 2 days of demand. Simply Steak is open 6 days a week throughout the year. a) Ignoring the cost of transportation from Evanston, what is the total annual cost of Simply Steak's inventory policy? Weight (lbs) 10 15 20 25 26 27 28 29 30 Shipping Cost ($) 2-day 62.97 Overnight 106.09 135.36 158.23 180.44 188.91 192.94 197.72 201.45 201.65 87.15 106.24 125.99 130.22 134.65 138.13 141.81 145.68 3-day 15.70 19.44 23.99 28.97 30.03 31.03 32.01 32.92 33.95

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To calculate the total annual cost of Simply Steaks inventory policy we need to consider the carryin... View the full answer