Question
(I see this question has been answered twice, but is it possible for this problem to be worked out in pencil and paper? I am
(I see this question has been answered twice, but is it possible for this problem to be worked out in pencil and paper? I am not understanding the solutions when typed.)
The Sun Up Convenience Store is open 365 days a year. Sun Up sells 30 bottles of Electric Energy Drink each day. It costs $10.00 for Sun Up to order Electric Energy Drink, regardless of the size of the order. The distributor of Electric Energy Drink sells Electric Energy to Sun Up for $0.50 a bottle, and the distributor delivers Electric Energy exactly four days after Sun Up places an order. If Sun Up were to hold one bottle of Electric Energy Drink in inventory for one year, it would cost Sun Up four times (or 400% of) the bottles cost.
- What order size will minimize Sun Ups costs? What is the total cost of this order size?
- Using the order size that will minimize Sun Ups total costs, how many bottles of Electric Energy Drink, on average, will be in inventory?
- Using the minimum cost order size, how frequently will Sun Up order Electric Energy Drink?
- When should Sun Up order Electric Energy Drink?
No excel or typed please.
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