Question

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 per order, and carrying costs are 4 cents per pound per day. Lead time for each order is 3 days, and the pepperoni itself costs $3 per pound. .If she were to order 80 pounds of pepperoni at a time, what would be the length of an order cycle?

A. 4 days
B. 5 days
C. 3 days
D. 0 days
E. 25 days.

Answer 1

Answer: The correct answer is "A. 4 days.".

Explanation: Four days would be the lenght of an order cycle because the quantity of the order must be divided on the demand rate, that is,

80 (quantity of the order to be ordered) / 20 (normal demand rate) = 4 days.