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 $10.00 per order, and carrying costs are $0.04 per pound per day. Lead time for each order is 3 days, and the pepperoni itself costs $3.00 per pound. If she were to order 80 pounds of pepperoni at a time, what would be the average invent

Answer 1

40 pounds would be the average inventory

Step-by-step explanation:

Total Order quantity= 80 pounds

Average inventory level = Order quantity / 2

= 80 pounds / 2

= 40 pounds

Hence, 40 pounds would be the average inventory