Question: Using EOQ, what is the yearly setup/ordering cost for this item? (Round to 2 decimal places.) Graeters Ice Cream plant uses dark chocolate chunks that
Using EOQ, what is the yearly setup/ordering cost for this item? (Round to 2 decimal places.)
Graeters Ice Cream plant uses dark chocolate chunks that are consumed each day when they make any of the chip-flavored ice creams. They estimate that they use 120 pounds of the chunks per day. The chocolate chunks cost the plant $3.75 per pound. The setup cost per order is $175 because they have to make sure that the chocolate is temperature controlled during transport. The holding costs are estimated to be 35% of the purchase price per pound. The ice cream factory produces ice cream 250 days per year.
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