An Introduction to Management Science 13th Edition by David Anderson,Dennis Sweeney ,Thomas Williams ,Jeffrey Camm, Kipp Martin

Exercise 6

Suppose that the R B Beverage Company has a soft drink product that shows a constant annual demand rate of 3600 cases. A case of the soft drink costs R B $3. Ordering costs are $20 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
b. Reorder point
c. Cycle time
d. Total annual cost