Determine optimal quantity to order and the reorder point

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The sales of a popular headache aspirin bottles at Merkle Pharmacies over the past six months have averaged 2,000 cases per month, which is the current order quantity. Merkle’s cost is $12.00 per case. The company estimates that the annual holding cost per case is $2.16. Suppose it takes 3 days to receive the order. The cost of placing an order is estimated to be $38.00 per order regardless of the order quantity. Suppose Merkle operates 250 days a year. a. Determine the optimal quantity to order and the reorder point. b. Determine the total annual cost per year under the ordering policy from part A

Reference no: EM131143142

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