What quantity would order to minimize your inventory costs

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Reference no: EM133353492

Question: You are the manager of the UT Coop. You sell stuffed Bevos at a rate of 50 per day with a standard deviation of demand of 30 per day. You sell them for $15 Iand each Bevo costs you $5.00. Shipping costs from your supplier are $10 per order and it costs you approximately $15 to ?ll out the order form. Because of your location your holding rate is 30%. Note that you are open 10 hours/day, 7 days/week, 365 days/year.

a) What quantity would you order to minimize your inventory costs?

b) If you ordered 850 Bevos (Not necessarily the answer in a.) each time What would your annual inventory costs be? (Note: you do not need to include cost to purchase the _Bevos since this is constant regardless of order size.)

Reference no: EM133353492

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