Operations Management
1. The Always Fresh Grocery Store carries a particular brand of tea that has the following characteristics:
Sales= 8 cases per week
Ordering cost= 20% per year
Item cost= $80 per case
a. How many cases should be ordered at a time?
b. How often will tea be ordered?
c. What is the annual cost of ordering and carrying tea?
d. What factors might cause the company to order a larger or smaller amount than the EOQ?