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Suppose that the R&B Beverage Company has a soft drink product that shows a constant annual...

Suppose that the R&B Beverage Company has a soft drink product that shows a constant annual demand rate of 3,600 cases. A case of the soft drink costs R&B $4. Ordering costs are $22 per order and holding costs are 23% 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:

  1. Economic order quantity. If required, round your answer to two decimal places.

    Q*=  
  2. Reorder point. If required, round your answer to the nearest whole number.

    r =  
  3. Cycle time. If required, round your answer to two decimal places.

    T =  days
  4. Total annual cost. If required, round your answer to two decimal places.

    TC = $  
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Answer #1

Working notes: Annual Demand ( in cases) Ordering Cost per order Carrying cost per annum 3,600 $22 $0.92 23% of $4 Formula Ec

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Answer #2
1).EOQ = √(2DCo)/ch = √(2*3600*20)/0.75 =438.17 //
source: Undergraduates
answered by: Ravindu
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