Determine the economic order quantity for a bar of soap

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Reference no: EM131917790

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Question 1 :

A resort hotel is planning to install a computerized inventory system to manage the complementary guest toilet items such as soap and shampoo. The daily usage rate for bars of soap is 16.

The effort to place an order and receive the shipment is approximately one-hour's time for a staff person who is paid $10 per hour. The opportunity cost of capital is 20% per year. A bar of soap is valued at approximately $0.25. The resort is open 365 days of the year. Determine the economic order quantity for a bar of soap.

Question 2 :

A resort hotel is planning to install a computerized inventory system to manage the complementary guest toilet items such as soap and shampoo. The daily usage rate for bars of soap is 16.

The effort to place an order and receive the shipment is approximately one-hour's time for a staff person who is paid $10 per hour. The opportunity cost of capital is 20% per year. A bar of soap is valued at approximately $0.25. The resort is open 365 days of the year. Once an order is placed it takes a full week (7 days) before delivery is made. Determine the reorder point for bar soap.

Reference no: EM131917790

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