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 4 cents per pound per day. lead time for each order is three days, and the pepperoni itself costs $3.00 per pound. what is the economic order quantity for pepperoni?
a. 80 pounds remainingb. 40 pounds remainingc. 60 poundsd. 20 poundse. 100 pounds

The economic order quantity for pepperoni for Ann Chovies is 100 pounds.

Explanation:

Please find the below for the detailed explanations and calculations:

We have the formula for Economic Order Quantity ( EOQ) = The square root of ( 2 x S x D / H)

in which: S stands for fixed ordering cost

               D stands for Quantity demand

                H stands for carrying costs

Apply in the questions, we have: S = $10.00; D = 20 pounds per day; H = 4 cents per day or $0.04 per day

=> EOQ = The square root of ( 2 x 10 x 20/0.04) = 100 pounds

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