Ada is running a store to sell soft-drink and snacks. For one soft-drink, given the daily demand is 32bottles with operating 360 days per year. The ordering cost is $10 per order and annual holding cost is $1per bottle. Lead time is 10 days.Determine the optimal order sizeDetermine the reorder pointDetermine the safety stockDetermine total annual inventory costNow, daily demand and lead time may vary. Average daily demand is 32 bottles and its standard deviationis 6 bottles.Average lead time is 10 days and its standard deviation is 4 days.Determine the reorder pointDetermine the safety stock with 95% service level

Basic Information The question is related to the Inventory Management. In this question first we…

Ada is running a store to sell soft-drink and snacks. For one soft-drink, given the daily demand is 3: bottles with operating 360 days per year. The ordering cost is $10 per order and annual holding co- per bottle. Lead time is 10 days. Determine the optimal order size etermine the reorder point etermine the safety stock

Ada is running a store to sell soft-drink and snacks. For one soft-drink, given the daily demand is 3: bottles with operating 360 days per year. The ordering cost is $10 per order and annual holding co- per bottle. Lead time is 10 days. Determine the optimal order size etermine the reorder point etermine the safety stock

FINANCIAL ACCOUNTING

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ISBN:9781259964947

Author:Libby

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Chapter1: Financial Statements And Business Decisions

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Question

Ada is running a store to sell soft-drink and snacks. For one soft-drink, given the daily demand is 32
bottles with operating 360 days per year. The ordering cost is $10 per order and annual holding cost is $1
per bottle. Lead time is 10 days.
Determine the optimal order size
Determine the reorder point
Determine the safety stock
Determine total annual inventory cost
Now, daily demand and lead time may vary. Average daily demand is 32 bottles and its standard deviation
is 6 bottles.Average lead time is 10 days and its standard deviation is 4 days.
Determine the reorder point
Determine the safety stock with 95% service level

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