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Demand for salamis is 182 per month Salamis cost $1.12 each The fixed cost of air-flight for an order of salamis is $375 Annual cost of capital is 16.5 percent, cost of shelf space is 5 percent the value of the item, and 1.8 percent of the value for taxes and insurance a) How many salamis should be ordered? How often? b) How many salamis should be on hand when the next order is placed? Know that the lead time is 3 weeks. c) Each salami sells for $3. Is this a profitable item? What annual profit can be realized? d) The salamis have a shelf life of 4 weeks. What is the trouble with the policy from part a)? What policy would need to be used? Are salamis still profitable?
 
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