Solution-Cycle inventory holding cost and safety stock

Cycle inventory holding cost and safety stock holding cost

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Reference no: EM131174764

MamaMia's Pizza purchases its pizza delivery boxes from a printing supplier. MamaMia's delivers on-average 200 pizzas each month (assume deterministic demand). Boxes cost 20 cents each, and each order costs $10 to process. Because of limited storage space, the manager wants to charge inventory holding at 30 percent of the cost. The lead time is 7 days, and the restaurant is open 360 days per year, assuming 30 days per month.

What are the total annual cost (only include holding cost and ordering cost) if applying your optimal order policy?

Based on your answers in the former questions (to avoid possible rounding issues, use the answers you provided in the last few questions), what is the total annual cost including total holding cost (both cycle inventory and safety stock inventory) and total ordering cost?

Notice that both cycle inventory holding cost and safety stock holding cost are included. Check your notes on this part.

Round your answer to the nearest whole number.

Reference no: EM131174764

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Cycle inventory holding cost and safety stock holding cost

Reference no: EM131174764

Reference no: EM131174764

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