Suppose a grocery store uses a P system for its inventory of apples, ordering once per week. Demand for apples averages 40 cases per week, with a standard deviation of 5 cases per week. Holding costs for the apples are $10 per case per year. The costs of each order are $150. The company carries 3 cases in safety stock to absorb uncertainty in demand. The company operates 52 weeks per year.

What are the expected annual holding costs?

Answer rating: 100% (QA)

To calculate the expected annual holding costs we need to consider the following factors the average ... View the full answer