Problem 10-01 (Algorithmic) 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 $2. Ordering costs are $22 per order and holding cos are 26% 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: . Economic order quantity. If required, round your answer to two decimal places. Q* = 551.9 X . Reorder point. If required, round your answer to the nearest whole number. r = 72 V . Cycle time. If required, round your answer to two decimal places. T = 38.3 x days 1. Total annual cost. If required, round your answer to two decimal places. TC = $

Problem 10-01 (Algorithmic) 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 $2. Ordering costs are $22 per order and holding cos are 26% 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: . Economic order quantity. If required, round your answer to two decimal places. Q* = 551.9 X . Reorder point. If required, round your answer to the nearest whole number. r = 72 V . Cycle time. If required, round your answer to two decimal places. T = 38.3 x days 1. Total annual cost. If required, round your answer to two decimal places. TC = $

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Problem 10-01 (Algorithmic)
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 $2. Ordering costs are $22 per order and holding costs
are 26% 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*
551.9 X
b. Reorder point. If required, round your answer to the nearest whole number.
r =
72
c. Cycle time. If required, round your answer to two decimal places.
T =
38.3
X days
d. Total annual cost. If required, round your answer to two decimal places.
TC = $

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