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CH 10 Assignment

# CH 10 Assignment - Revised March 2011 Chapter 10...

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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.

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CH 10 Assignment - Revised March 2011 Chapter 10...

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