A beer distributor sells 500 cases of regular 12-oz. Budweiser per week for 50 weeks each year - assume that there are 50 weeks in a year - from its warehouse in Central Austin. The distributor currently orders a one-week supply of 500 cases at the beginning of each week from a supplier at a purchase cost of $8 per case. They also pay a fixed cost of $100 for each delivery. The beer distributor estimates its annual per-case inventory holding cost (cost of capital, insurance, etc.) at 25 percent of purchase cost.

(a) What is the distributor's annual ordering plus holding costs (in $)?

(1)

(b) What is the distributor's ordering plus holding costs (in $) per case of beer? Round up or down to two significant figures after the decimal point.

(1)

(c) How long (in weeks) on average does a case of beer sit on the distributor's shelf before it is

sold? Do not round up or down.

(1)

(d) What order size would you recommend to the beer distributor? Choose the nearest integer.

(1)

(e) For the distributor, what is the minimum possible annual cost (in $) of ordering and holding? Choose the nearest integer.

(1)

(f) For the distributor, what is the minimum possible cost (in $) of ordering and holding per case of beer?Round up or down to two significant figures after the decimal point.

(1)

(g) Consider the reduction in the cost of ordering and holding per case of beer if the distributor switches to the EOQ policy. Is it More or Less than 35%?