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Inventory: The Optimal Number of Pizzas

Judith Thompson is the manager of the student center cafeteria. She is introducing pizza as a menu item. The pizza is ordered frozen from a local pizza establishment and baked at the cafeteria. Judith anticipates a weekly demand of 10 pizzas. The cafeteria is open 45 weeks a year, 5 days a week. The ordering cost is $15 and the holding cost is $0.50 per pizza per year. What is the optimal number of pizzas Judith should order?

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Solution Summary

This solution determines how many pizzas a manager of a cafeteria should order based on an anticipated weekly demand of 10 pizzas.