How often should the hotel use pickup-and-delivery service

How often should the hotel use pickup-and-delivery service

Assignment Help Operation Management

Reference no: EM13902748

A hotel uses an external laundry service to provide clean towels. The hotel generates 600 dirty towels a day. The laundry service picks up the dirty towels and replaces them with clean ones at regular intervals. There is a fixed charge of $81 per pickup and delivery service, in addition to the variable cost of $0.60 per towel. It costs the hotel $0.02 a day to store a dirty towel and $0.01 per day to store a clean one. How often should the hotel use the pickup-and-delivery service? Note: There are two types of inventory items in this situation; as the level of the dirty towels increases, that of clean towels decreases at an equal rate.

Reference no: EM13902748

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