Question

Purinnerds Dog Food is a very popular product at Kay Gnetin’s corner grocery. Demand for this is relatively constant, and the total demand for the year is 1,200 bags. The cost of placing an order is $50, while the holding cost is $3 per unit per year. The store is open 300 days per year. Lead-time for this is 8 days. Currently, Kay orders 50 time per year.

- If Kay places 50 orders per year, what would her annual total inventory costs be?

- 1936
- 600
- 1200
- 2536

- If Kay wishes to minimize her total inventory cost, how many units should she order each time an order is placed?

- 24
- 100
- 200
- 1200

- Should Kay change the current order policy and, if so, how much can she save?

- 1936
- 600
- 1200
- 2536

- What is the reorder point?

- 24
- 32
- 200
- 8

Please help!

Answer #1

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