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We appreciate your visit to Geoff discovered the following while reviewing his shopping records The price of cat food is 89 cents per can Each of the seven cats consumes. This page offers clear insights and highlights the essential aspects of the topic. Our goal is to provide a helpful and engaging learning experience. Explore the content and find the answers you need!

Geoff discovered the following while reviewing his shopping records:

- The price of cat food is 89 cents per can.
- Each of the seven cats consumes an average of one can per day, 365 days a year.
- Gasoline costs $3.50 per gallon, and his pickup uses one gallon each way to the cat food store.
- The holding cost for a can of cat food is 10% of the unit price.
- Each can occupies 13 cubic inches of pantry space.

Using an EOQ policy for managing cat food purchases, determine the average pantry space occupied by the cat food.

A. 2.4 cubic feet
B. 24 cubic feet
C. 4.8 cubic feet
D. 12 cubic feet

Answer :

Final answer:

The average pantry space occupied by cat food, following the EOQ policy, is approximately 4.8 cubic feet (option c).

Explanation:

To calculate the average pantry space occupied by cat food, we can use the Economic Order Quantity (EOQ) formula. The EOQ formula will help us determine how much cat food Geoff should order at a time to minimize costs, and from that, we can calculate the average space required.

EOQ Formula:

EOQ = √[(2 * D * S) / H]

Given information:

Price per can of cat food (unit price) = $0.89

Each cat consumes one can of cat food per day for 365 days.

Price of gasoline per gallon = $3.50

Pickup uses one gallon for a round trip to the cat food store.

Holding cost per can of cat food = 10% of the unit price

Each can of cat food takes up 13 cubic inches of space.

First, let's calculate the annual demand (D):

D = 7 cats * 1 can per cat per day * 365 days = 2,555 cans

Now, calculate the ordering cost per order (S). Since the pickup uses a gallon of gasoline for each round trip, and the price of gasoline is $3.50 per gallon, S = $3.50.

Next, calculate the holding cost per unit per year (H):

H = 10% of the unit price = 0.10 * $0.89 = $0.089

Now, plug these values into the EOQ formula:

EOQ = √[(2 * 2,555 * $3.50) / $0.089]

EOQ ≈ √[(17,892.50) / $0.089]

EOQ ≈ √201,000

EOQ ≈ 448.67 (approximately)

Now, we need to calculate the average space required for EOQ. Since each can of cat food takes up 13 cubic inches of space, we can calculate the space required for EOQ:

Space required for EOQ = EOQ * 13 cubic inches

Convert the result to cubic feet:

Space required for EOQ = (448.67 * 13) / 123 = 4.8 cubic feet

Learn more about EOQ here:

https://brainly.com/question/32615831

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