Answer:
Explanation:
A) The current order cycle length = 2 weeks
= 2 / 50 year = 0.04 year
B) The current order size
cycle time ( 2 weeks ) * demand per unit time ( 100 bottles )
= 2 * 100 bottles = 200 bottles
C) average inventory
= order size / 2 weeks = 200 / 2 = 100 bottles
D) calculate how much the liquor store spend per year on ordering
first we calculate the number of orders per year = 50 / 2 = 25
next the amount spent per year on ordering = 25 * 10 = 250
E) calculate inventory holding costs per year
= average inventory * cost of holding per bottle
= 100 * 2 = 200