Assignment:
Problem
Foods Galore is a major distributor to restaurants and other institutional food users. Foods Galore buys cereal from a manufacturer for $26 per case. Annual demand for cereal is 237,500 cases, and the company believes that th demand is constant at 950 cases per day for each of the 250 days per year that it is open for business. Average lead time from the supplier for replenishment orders is nine days, and the company believes that it is also constant. The purchasing agent at Foods Galore believes that annu inventory carrying cost is 20 percent and that it costs $44 to prepare, send, and receive an order.
1. How many cases of cereal should FoodsGalore order each time it places an order?
2. What will be the average inventory?
3. What will be the inventory turnover rate?