This preview shows pages 1–2. Sign up to view the full content.
This preview has intentionally blurred sections. Sign up to view the full version.
View Full Document
Unformatted text preview: Revised March 2011 Chapter 10 Assignments: Problem 1 Suppose that the R & B Beverage Company has a soft drink product that shows a constant annual demand rate of 3600 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 b. Reorder point c. Cycle time d. Total annual cost Problem 2 A general property of the EOQ inventory model is that total inventory holding and total ordering costs are equal at the optimal solution. Use the data in Problem 1 to show that this result is true. Use proper formulas to show that, in general, total holding costs and total ordering costs are equal whenever Q * is used....
View
Full
Document
This note was uploaded on 03/27/2011 for the course ECON 1106 taught by Professor Abc during the Spring '11 term at Algoma University.
 Spring '11
 abc

Click to edit the document details