Assume there are 52 weeks per year.

Wine Etc. is wine wholesale distributer. It sells wine to supermarket chains around the country. Black Leaf is one of its popular wine and it has a weekly demand of 40 cases. Wine Etc. purchases each case for $125. Each order has fixed cost of $300 (independent of the quantity ordered). Annual holding cost for Wine Etc. is 15 percent.

a) What order quantity of Black Leaf minimizes Wine Etc. annual ordering and holding costs?

b) If Wine Etc. chooses to order 300 cases each time , what is the sum of its annual ordering and holding costs?

c) If Wine Etc, chooses to order 100 cases each time, what is the sum of the ordering and holding costs incurred by each case sold?

D) If Wine etc. is restricted to ordering in multiples of 50 cases (e.g., 50, 100, 150, etc.), how many cases should it order to minimize its annual ordering and holding costs?