Fush uses an average of 40 boxes of paper serviettes a day. The restaurant operates 260 days per year, storage and handling costs for the serviettes are $ 30 per year per box, and it costs approximately $60 to order and receive a shipment of serviettes. Except for rounding, are annual ordering costs and carrying costs always equal at the EOQ? The manager is currently using an order size of 200 boxes, but wants to make sure he is managing supplies "in a cost efficient manner". Would you recommend that the manager use the optimal order size instead of 200 boxes
Fush uses an average of 40 boxes of paper serviettes a day. The restaurant operates 260 days per year, storage and handling costs for the serviettes are $ 30 per year per box, and it costs approximately $60 to order and receive a shipment of serviettes. Except for rounding, are annual ordering costs and carrying costs always equal at the EOQ? The manager is currently using an order size of 200 boxes, but wants to make sure he is managing supplies "in a cost efficient manner". Would you recommend that the manager use the optimal order size instead of 200 boxes
Purchasing and Supply Chain Management
6th Edition
ISBN:9781285869681
Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Chapter16: Lean Supply Chain Management
Section: Chapter Questions
Problem 10DQ: The chapter presented various approaches for the control of inventory investment. Discuss three...
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Fush uses an average of 40 boxes of paper serviettes a day. The restaurant operates 260 days per year, storage and handling costs for the serviettes are $ 30 per year per box, and it costs approximately $60 to order and receive a shipment of serviettes.
Except for rounding, are annual ordering costs and carrying costs always equal at the EOQ?
The manager is currently using an order size of 200 boxes, but wants to make sure he is managing supplies "in a cost efficient manner". Would you recommend that the manager use the optimal order size instead of 200 boxes?
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