Essay
A local ice cream shop sells 10,000 cones of vanilla-flavored ice cream each year.The cones are ordered from an outside supplier and it takes 5 days for each shipment of cones to arrive.Ordering costs are estimated at $15 per order.Carrying costs are $5 per cone per year.Assume that the ice cream shop is open 250 days a year.
a.What is the optimal EOQ for ice cream cones?
b.What is the total cost of ordering and carrying the ice cream cones?
c.What is the maximum inventory of cones held in a given ordering cycle?
d.What is the average inventory held in a given ordering cycle?
e.What is the reorder point (ROP)?
Correct Answer:
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a.Optimal order quantity = 2...View Answer
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Correct Answer:
Verified
a.Optimal order quantity = 2...
View Answer
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Get Access to more Verified Answers free of charge
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