Attractive order quantity compared to order batch size

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Reference no: EM132266621

MamaMia’s Pizza Purchases its pizza delivery boxes from printer. MamaMia’s delivers an average of 200 pizzas monthly. Boxes cost 20 cents each, and each order costs $10 to process. Because of limited storage space, the manager wants to charge inventory holding at 30 percent of cost. The lead time to obtain boxes from the printer is one week, and the restaurant is open 360 day per year,

a) What is the Economic Order Quantity (EOQ)?

b) What is the total annual inventory cost?

c) Why is EOQ an attractive order quantity compared to order batch size?

Reference no: EM132266621

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