BADM 7120: Operations Management Inventories with Constant Demand Example Problem #1: Suppose that the R & B Beverage Company has a soft drink product that shows a constant annual demand rate of 3600 cases. A case of the soft drink costs R & B $3.00. Ordering costs are $20.00 per order, and holding costs are 25% of the value of the inventory. R & B has 250 working days per year, and the lead time for an order is 5 days. Identify the following aspects of the inventory policy. A. The optimal order quantity. B. The total annual cost for the soft drink in inventory at the optimal order quantity. C. The soft drink's reorder point. D. The soft drink's cycle time - the time between orders.