Pizzas Per MonthQuestionsCost ofBoxesOrdering to CostWhat is the EOQ?Lead TimeOpen DaysWhat is the re-order point?Holding CostHolding Cost Per UnitWhat is the number of orders per year?EOQ FormulaTotalAnnual CostNumber2DemandCost Per OrderMamaMia’s Pizza purchases its pizza delivery boxes from aprinting supplier. MamaMia’s delivers on-average 225 pizzas eachmonth (assume deterministic demand). Boxes cost 43 cents each, andeach order costs $12.50 to process. Because of limited storagespace, the manager wants to charge inventory holding at 25% percentof the cost. The lead time is 7 days, and the restaurant is open360 days per year, assuming 30 days per month.DividedbyHoldingCost Per UnitSquare RootRe-Order PointUnits Per DayxLead
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