Ann Chovies, Owner of the Perfect Pasta Pizza Parlor, Uses

question 53

Multiple Choice

Ann Chovies, owner of the Perfect Pasta Pizza Parlor, uses 20 pounds of pepperoni each day in preparing pizzas. Order costs for pepperoni are $10.00 per order, and carrying costs are 4 cents per pound per day. Lead time for each order is three days, and the pepperoni itself costs $3.00 per pound. If she were to order 80 pounds of pepperoni at a time, what would be the length of an order cycle?

• A)0 days
• B)0.25 days
• C)3 days
• D)4 days
• E)5 days

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Definitions:

Average Product

Average Product is the output per unit of input, calculated by dividing total product by the quantity of the input.

Marginal Product

The additional output that is produced by adding one more unit of a specific input, while holding other inputs constant.

Average Product

In economics, the output produced per unit of input, used to measure productivity efficiency.

Marginal Product

The increase in output that results from a one-unit increase in the input, holding all other inputs constant.