MapleSugar Company Uses Quantitative Models for Inventory Control

question 52

Essay

MapleSugar Company uses quantitative models for inventory control.For canned syrup,the annual demand is 8,000 cases.The supplier is 500 kilometres away,and it usually takes three days to get an order filled.The average order costs $16 to process and the carrying cost per case is $40 per year.The business is open 300 days a year.
a.Determine the economic order quantity.
b.Determine the reorder point if a safety stock of 24 cases is desired.

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