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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
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