Ann Chovies, owner of the Perfect Pasta Pizza Parlor, uses 20 pounds of pepperoni each day in preparing pizzas. Order costs for pepperoni are $10.00 per order, and carrying costs are 4 cents per pound per day. Lead time for each order is three days, and the pepperoni itself costs $3.00 per pound. At what point should she reorder pepperoni?

Question

Quizplus · Accepted Answer

To determine the reorder point, we need to calculate the amount of pepperoni used during the lead time. Since Ann uses 20 pounds of pepperoni each day and the lead time is three days, she should reorder when she has 3 days * 20 pounds/day = 60 pounds remaining. This ensures she won't run out of pepperoni before the new order arrives.

Ann Chovies, Owner of the Perfect Pasta Pizza Parlor, Uses