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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![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](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa347ada1-08d4-435c-ad85-b7df372e23fa%2Feaa4eb33-8122-4e39-a203-16aad5770583%2Fj1lweul_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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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