Chapter 16, Problem 4.1CP

Summary Introduction

Case summary:

The case deals with the food company that produces a variety of food products. There would be 60 bags of the candy per case and the price is $9.85 per bag (wholesale). Annual carrying cost is $116 and the ordering cost is $4,700. Each diamond would weigh 1.2 ounces and it requires 0.70 ounce of blended chocolates, 0.50 ounce of macadamia nuts, and 0.40 ounce of filling. The annual ordering cost for chocolate is $5,700 and the carrying cost is $0.45 per pound. The ordering cost for macadamia nuts is $6,300 and the carrying cost is $0.63 per pound. The ordering cost for filling is $4,500 and the carrying cost is $0.55 per pound. The following information are given:

To determine: The inventory order quantity for each of the three primary ingredients.