Question: A beer distributor finds that it sells, on average, 1 0 0 cases a week of Xinjiang Black Beer. For this problem assume that demand

A beer distributor finds that it sells, on average, 100 cases a week of Xinjiang Black Beer. For this problem assume that demand occurs at a constant rate over a 50-week year. Beer is purchased at a price of $8 per case. The inventory-related holding cost rate is 25%. Each order placed with the supplier costs the distributor $10. Questions (For each question select the choice CLOSEST to your answer)
1. What order quantity (Q) minimizes the distributors total inventory-related costs?
a.5000 cases
b.100 cases
c.224 cases
d.448 cases
2. What is the expected number of orders that the distributor will place in a year?
a.22.4 orders
b.5000 orders
c.100 orders
d. Cannot be determined from the information given
3. What is the average inventory level that the distributor can expect?
a.224 cases
b.112 cases
c.100 cases
d. Cannot be determined from the information given
4. What is the inventory-related annual total cost?
a. $447
b. $224
c. $7.60
d. Cannot be determined from the information given

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