Sunstar Ice Cream Sells 12,000 gallons of ice cream each month from its central storage facility. Monthly carrying cost are P.10 per gallon and ordering cost are P50 per order. Ignore potential stockout cost and assume a 30 days month. What is the optimal length of the inventory cycle? How many orders will be placed per month?

Purchasing and Supply Chain Management
6th Edition
ISBN:9781285869681
Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Chapter16: Lean Supply Chain Management
Section: Chapter Questions
Problem 10DQ: The chapter presented various approaches for the control of inventory investment. Discuss three...
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Sunstar Ice Cream Sells 12,000 gallons of ice cream each month from its central storage
facility. Monthly carrying cost are P.10 per gallon and ordering cost are P50 per order.
Ignore potential stockout cost and assume a 30 days month.

What is the optimal length of the inventory cycle?
How many orders will be placed per month?

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