Andronicorsquos in the financial center is open 300 days a, Operation Management

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Andronicorsquos in the financial center is open 300 days a

Andronico’s in the financial center is open 300 days a year. They sell Organic Hummus; and sales are approximately normally distributed with an average of 100 tubs/day and a standard deviation of 25 tubs/day. The wholesale cost is $1.80/tub, and they calculate their annual holding costs by using 20% of the wholesale cost. Orders cost $50 to place, regardless of number of tubs ordered and take 4 days to arrive.

a) What is the economic order quantity (EOQ) for Organic Hummus?

b) What are total annual cycle-stock holding costs for Organic Hummus?

c) What are the total annual fixed order costs for Organic Hummus?

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Operation Management: Andronicorsquos in the financial center is open 300 days a

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Operation Management: Andronicorsquos in the financial center is open 300 days a

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