Question

s flour in 15-pound bags. Panera Bread uses 5000 bags of flours each year. Carrying/holding costs are $20 per bag per year. Ordering costs are estimated at $5 per order. Assume that Panera Bread Chicago bakery is open 250 days a year and its daily demand is estimated at 20 bags. It takes 5 days for each order of flour to be filled. What is the minimum inventory held in a given EOQ cycle

Answer 1

Answer:

0 bags

Explanation:

Given that

Usage of bags per year = 5,000 bags

Carrying or holding cost per bag per year = $20

Ordering cost = $5 per order

Number of days open = 250 days

Estimated Daily demand = 20 days

Filling days required = 5 days

Based on the above information, the minimum inventory should be equal to zero as the daily demand is remains constant throughout the year. Therefore, it would be zero before replenishment