Question

Regional Supermarket is open 355 days per year. Daily use of cash register tape averages 18 rolls. Usage appears normally distributed with a standard deviation of 2 rolls per day. The cost of ordering tape is $.75, and carrying costs are 36 cents per roll a year. Lead time is 2 days.Use Table1 and Table2.What is the EOQ?

Answer 1

The Economic Order Quantity (EOQ) for ordering cash register tape is approximately 189 rolls.

Step-by-step explanation:

To calculate the Economic Order Quantity (EOQ), we can use the formula:

EOQ = √[(2 x ordering cost x annual demand) / carrying cost]

In this case, the ordering cost is $0.75, the annual demand is 18 rolls per day multiplied by 355 days, and the carrying cost is $0.36 per roll per year.

Plugging these values into the formula, we get:

EOQ = √[(2 x $0.75 x (18 x 355)) / $0.36]

= √35700

= 189.03

Therefore, the EOQ is approximately 189 rolls.