Problem 14-1 (Algorithmic) Suppose that the R&B Beverage Company has a soft drin
ID: 337986 • Letter: P
Question
Problem 14-1 (Algorithmic)
Suppose that the R&B Beverage Company has a soft drink product that shows a constant annual demand rate of 3350 cases. A case of the soft drink costs R&B $3. Ordering costs are $25 per order and holding costs are 25% of the value of the inventory. R&B has 250 working days per year, and the lead time is 5 days. Identify the following aspects of the inventory policy:
a) Economic order quantity. If required, round your answer to two decimal places.
Q* =
b) Reorder point.
r =
c) Cycle time. If required, round your answer to two decimal places.
T = ___ days
d) Total annual cost. If required, round your answer to two decimal places.
TC = $ ____
Explanation / Answer
Problem 14-1 (Algorithmic)
Suppose that the R&B Beverage Company has a soft drink product that shows a constant annual demand rate of 3350 cases. A case of the soft drink costs R&B $3. Ordering costs are $25 per order and holding costs are 25% of the value of the inventory. R&B has 250 working days per year, and the lead time is 5 days. Identify the following aspects of the inventory policy:
a) Economic order quantity. If required, round your answer to two decimal places.
Q* =
b) Reorder point.
r =
c) Cycle time. If required, round your answer to two decimal places.
T = ___ days
d) Total annual cost. If required, round your answer to two decimal places.
TC = $ ____