Foods Galore is a major distributor to restaurants and other institutional food users.

Foods Galore buys cereal from a manufacturer for $24 per case. The annual demand for cereal is 227,500 cases, and the company believes that the demand is constant at 910 cases per day for each of the 250 days per year that it is open for business. The average lead time from the supplier for replenishment orders is nine days, and the company believes that it is also constant. The purchasing agent at Foods Galore believes that the annual inventory carrying cost is 25 percent and that it costs $72 to prepare, send, and receive an order.

a. How many cases of cereal should Foods Galore order each time it places an order? (Round your answer to the nearest whole number.)

b. What will be the average inventory?

Answer rating: 100% (QA)

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