Compute the total cost of inventory

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Reference no: EM132809596

Joe's Bar (not its real name) uses 800 kegs of adult beverages per year on a continuous basis (assume 365 days of operations per year). The order cost is $50.00 per order and the carrying cost is $2.00 per unit. It takes 5 days to receive a shipment after an order has been placed (old Joe took this TQM course so he now believes in JIT inventory methods - in other words- assume no safety stock).

Problem a. Calculate the EOQ

Problem b. Determine the average level of inventory

Problem c. Determine the reorder point

Problem d. Compute the Total Cost of Inventory

Reference no: EM132809596

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