14. If he were to order 16 cases of Stein beer at a time, what would be the av-
ID: 328583 • Letter: 1
Question
14. If he were to order 16 cases of Stein beer at a time, what would be the av- erage inventory level? Ann Chovies, owner of the Perfect Pasta Pizza Parlor, uses 20 pounds of pep- peroni cach day in preparing pizzas. Order costs for pepperoni are $10.00 per order, and carrying costs are 4 cents per pound per day. Lead time for each or- A. 4 cases B. 12 cases der is 3 days, and the pepperoni itself costs $3.00 per pound C. S cases D. 20 cases E. 16 cases 17. At what point should she reorder pepperoni? A. 20 pounds remaining B. 40 pounds remaining C. 60 pounds remaining D. 80 pounds remaining E. 100 pounds remaining 15. If he were to order 16 cases of Stein beer at a time, what would be the daily total inventory costs, EXCLUDING the cost of the beer? A. $2.00 ?.$400 C $1.28 D. $3.28 E. $2.56 the 18. If she were to order 80 pounds of pepperoni at a time, what would be length of an order cycle? A. 0 days B. 0.25 days C. 3 days D. 4 days E. 5 days 16. What is the economic order quantity for Stein beer? A. 8 cases 13 11 cases C. 14 cases D. 20 cases E. 32 casesExplanation / Answer
Demand , D = 20 pounds per day
Order cost, S = $10 per order
Carrying cost , I = $ 0.04 per pound per day
Item Cost , C = $3 per pound
Lead time, LT = 3 days
17.
Reorder point , ROP = D*LT = 20*3 = 60 pounds
so ,when effective inventory level drops to 60 pounds, place a replenishment order.
Answer C) 60 Pounds remaining
18. length of order cycle = Order quantity / ( Demand per day ) = 80 /20 = 4 days
Answer D ) 4 days
19 . Order quantity, Q = 80 pounds
Average Inventory , AIL = Q/2 = 80/2 = 40 pounds
Answer - B 40 pounds
20) Q = 80 Pounds
Total cost = Cost of Pepperoni+ Order cost + Inventory Carrying cost
Order cost per day = S/Order Cycle = 10/4 = 2.5
Cost of Pepperoni = Cost per Order/ Order cycle = 80*3 / 4 = 60
Inventory carrying cost = (IC*Q/2) = 0.04*3*40 = 4.8
Total cost = 60+2.5+4.8 = $ 67.3 Per day
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