How much money does this save in total

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Reference no: EM133738842

Problem

The Frisco Roughriders wants to explore their inventory policy on purchasing of hot dogs. They are currently using 200 cases of hot dogs per month and ordering 400 cases of hot dogs at a time.

                                       Hot Dogs
Order cost                         $15
Holding cost per case    $0.20

1) Under their current ordering scheme, what is the total cost?

2) Using an EOQ model, what would their total costs?

3) How much money does this save in total?

4) Their supplier has offered an alternative deal of placing a monthly order of 200 cases of hot dogs, In exchange for the fixed monthly order, the supplier will change the order cost to a $10 each month. Should they take the supplier up on this offer?

Reference no: EM133738842

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