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Rise and Shine has been buying cereal directly from the manufacturer for $ 3 2 per case. The company's annual demand for cereal is 2
Rise and Shine has been buying cereal directly from the manufacturer for $ per case. The company's annual demand for cereal is cases and the company believes that the demand is constant for each of the days per year that it is open for business. Average lead time from the supplier for new orders is a constant working days. The purchasing agent at Rise and Shine estimates the annual inventory carrying cost is $ per case and it costs approximately $ to prepare, send, and receive an order. Round calculations to at least decimal places.
a Based on the economic order quantity, how many cases of cereal should Rise and Shine order each time it places an order?
b What would the average annual inventory be based on the answer to a
c What is the reorder point based on the answer to a
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