Kinds of organic liquid soap-regular-lavender-citrus

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Reference no: EM131116703

Sarah’s Organic Soap Company makes four kinds of organic liquid soap- “regular”, “lavender”, “citrus” and “tea tree”. Sarah needs to purchase organic Palm oil to make her soaps. She needs 1,000 kgs of Palm oil per day on average. The supplier charges a $60 delivery fee per order (which is independent of the order size) and $4.75 per kg. Sarah’s annual holding cost is 25%. Assume 52 weeks per year and 5 days per week. If Sarah wants to minimize inventory holding and ordering costs, how much Palm oil should she purchase with each order (in kgs)? Show Calculation.

Reference no: EM131116703

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Kinds of organic liquid soap-regular-lavender-citrus : Sarah’s Organic Soap Company makes four kinds of organic liquid soap- “regular”, “lavender”, “citrus” and “tea tree”. Sarah needs to purchase organic Palm oil to make her soaps. She needs 1,000 kgs of Palm oil per day on average.

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