Suppose that after investigating ordering cost

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A food manufacturer uses approx. 50,000 glass jars a month for the one of its products. A lot size of 5,000 jars has been used. Annual holding cost is $2.00 per jar, and ordering cost is $350.00 per order. A. What penalty is the company incurring by using its present order size rather than the EOQ model? B. The manager would prefer ordering 50 times each year but would have to justify and change in order size. One possibility is to simplify order processing to reduce the ordering cost. What ordering cost would enable the manager to justify ordering 50 times per year? C. Suppose that after investigating ordering cost, the manager is able to reduce it to $300. How else could the manager justify using an order size that would be consistent with ordering 50 times per year?

Reference no: EM132207055

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