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Trojan Sandwiches uses the same bread for all of its




Trojan Sandwiches uses the same bread for all of its sandwiches, ordered from Bakery XYZ. Bakery XYZ charges $5 for a loaf of its bread, from which 10 sandwiches can be made. Every shipment of bread from Bakery XYZ to Trojan Sandwiches costs $50. Rather than have bread deliveries every day, so that the sandwiches are made from freshly baked bread, Trojan Sandwiches has decided to have deliveries once every two weeks. Trojan Sandwiches freezes Bakery XYZ?s bread immediately to seal in freshness, and then make sandwiches using bread toasted from frozen. Trojan Sandwiches estimates the annual holding cost for freezer space at $5 per loaf of bread. There is demand for 50 Trojan sandwiches every day. (Assume 52 weeks in a year and 365 days in a year.);a. [7.5 points] What is the current total annual cost (purchase + setup + holding) of Trojan Sandwiches ordering policy?;b. [7.5 points] How many loaves of bread should Trojan sandwiches order at a time in order to minimize their annual order and storage costs?;c. [5 points] What is the total annual cost under the ordering policy in part (b)? How much money will Trojan sandwiches save each year by following the ordering policy in (b)?;d. [5 points] How many times a year wills Trojan sandwiches order bread under the ordering policy in part (b)? How many days will there be between order placements?


Paper#33538 | Written in 18-Jul-2015

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