Question

Cool Gelato uses various sizes of foam cups. The use of 8oz foam cups is constant throughout the year, and Cool Gelato expects to use a total of 35,000 units of 8oz cups in 2017. The cost of ordering and receiving the foam cups from the supplier is $25, regardless of how many is ordered. It takes 3 days for the supplier to deliver the foam cups to Cool Gelato each time without variability. Cool Gelato pays $.50 per cup and estimates its annual holding cost to be 25% of its wholesale value. Cool Gelato will operate 350 days in 2017. Answer the following questionsa. What is the economic order quantity for the 8oz foam cups? The EOQ should be an integer value. b. How many times does Cool Gelato need to place orders in 2017 if they use the EOQ? c. How much inventory does Cool Gelato need to hold on average if they use the EOQ? d. How much would the total annual cost for the 8oz cups be if they use the EOQ? e. What is the reorder point (ROP)?

Answer 1

The answer and procedures of the exercise are attached in the following archives.

Step-by-step explanation:

You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.