What is the optimal order interval

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The Dominick's supermarket chain sells Nut Flakes, a popular cereal manufactured by the Tastee cereal company. Demand for Nut Flakes is 1.000 boxes per week. Dominick's uses an interest rate of 25 percent per year for holding cost and incurs a fixed tracking cost of $200 for each replenishment order it places with Tastee. Given that Tastee charges $2 per box of Nut Flakes, how much should Dominick's order in each replenishment lot? What is the optimal order interval? (Assume that 1 year = 52 weeks).

Reference no: EM131095962

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