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Problem 10-01
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 $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. If required, round your answer to two decimal places.
b. Reorder point.
C. Cycle time. If required, round your answer to two decimal places.
T =
days
d. Total annual cost. If required, round your answer to two decimal places.
TC = $