Tanning Company analyzes its receivables to estimate bad debt expense. The accounts receivable balance is $374,000 and credit sa
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Answer:
The optimal number of pizza that Judith should order is 184.
Explanation:
Judith is introducing pizza in the cafeteria menu.
She is expecting a weekly demand of 10 pizzas.
The cafeteria is open 45 weeks a year.
The ordering cost of pizza for Judith is $15 and the holding cost is $0.40.
The annual demand for pizza
=
= 450
The optimal number of pizza will be the economic order quantity.
Economic order quantity can be defined as the optimal order quantity that a company should make to minimize its total cost of inventory.
Economic order quantity
=
=
=
= 183.71
So the optimal number of pizza that Judith should order is 184.