The O'Donnell Bottling Company distributes a wide selection of soda pop to the surrounding local communities. The lemon-lime soda pop is sold in crates containing 24 medium-sized bottles. The selling price of one crate is $15. It has been determined that the materials cost per crate of soda is $8. The ordering cost for the raw materials used to manufacture the soda pop is $2.60 per order, and the carrying cost is $1.60 per crate per year. The monthly requirement for the soda pop is 52 crates, and lead time is 3 weeks before delivery of the materials. mi86 Required:

a Calculate the economic order quantity using crates as the unit of measurement. The management prefers to use the formula method of determining EOQ.

b The weekly usage of materials is equivalent to 288 bottles. Calculate the order point and present it on a graph. (Use the same units as in part a.)

c What would the safety stock be if the weekly usage rate became 16 crates and the materials are delayed for 7 weeks?