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Ivanshal [37]
3 years ago
8

Ann Chovies, owner of the Perfect Pasta Pizza Parlor, uses 20 pounds of pepperoni each 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 order is three days, and the pepperoni itself costs $3.00 per pound. If she were to order 80 pounds of pepperoni at a time, what would be the length of an order cycle?(A) 4 days(B) 5 days(C) 3 days(D) 0 days(E) .25 days
Business
1 answer:
coldgirl [10]3 years ago
3 0

Answer:

Option (A) is correct.

Explanation:

Given that,

Order costs for pepperoni = $10.00 per order

Carrying costs = 4 cents per pound per day

Lead time for each order = 3 days

Pepperoni itself costs = $3.00 per pound

Total Order = 80 pounds of pepperoni

Demand rate = 20

Total ordering cost = Total order × cost per order

                                = 80 × $10

                                = $800

Length of an order cycle:

=\frac{Order\ quantity}{Demand\ rate}

=\frac{80}{20}

= 4 days

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