What quantity should the store order with each order

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Reference no: EM132228027

An auto parts supply superstore sells 2500 one-gallon bottles of their most popular windshield wiper fluid each week. There are 10 one-gallon bottles in each case. Windshield fluid is purchased from a single supplier (no qty discounts) for $40 per case. The average cost of ordering and recieving a shipment is $25 per order. Accounting has stipulated a standard holding cost of 25% of the case cost of the product. The supplier lead time is 2 weeks. Assume the store operates 50 weeks per year.

a. What quantity should the store order with each order?

b. How many times per year will the store order?

c. How many weeks will elapse between 2 consecutive orders?

d. What is the reorder point if the company wishes to carry a safety stock of 200 cases?

e. What is the store's minimum total annual ordering and inventory carrying cost?

Reference no: EM132228027

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