Chapter 12, Problem 3OTQ

Summary Introduction

Introduction

Company BB is engaged in production and selling of bagels. It is one of the top successful firms with over 450 shops in the industry. Many stores of company BB generate an average of $800,000 annual sales.

The production of bagels is done is batches and according to flavor. The production begins at the processing floor where the ingredients are mixed in a special machine. They are loaded into another truck after they are formed and transported to the store. Finals steps of boiling and malting are done at the store which is shown in the figure.

Quality is a main feature of a successful business and the customers give high preference to quality, taste and consistency. Company BB gives high importance to quality at each stage of its operation. The employees are instructed to conduct a manual check to identify deformed bagels.

The company operates with minimum amount of inventory of partially completed bagels at the plant. It gives high freshness to the product and also allows keeping the cost low with less space.

To determine: The appropriate inventory model which can be used to order ingredients for bagels.