Judith Thompson, the manager of the student center cafeteria, has added pizza to the menu. The pizza is ordered frozen from a local pizza establishment and baked at the cafeteria. Judith anticipates a yearly demand of 2500 pizzas.
The cafeteria is open 250 days a year. The ordering cost is $15 and the holding cost is $0.40 per pizza per year.
The pizza vendor has a 2-day lead-time and Judith wants to maintain 1 pizza for safety stock. What is the optimal reorder point?