Joe's Bar uses 800 kegs of adult beverages per year on a continuous basis (assume 365 days of operations per year). The order cost is $50.00 per order and the carrying cost is $2.00 per unit. It takes 5 days to receive a shipment after an order has been placed (old Joe took this TQM course so he now believes in JIT inventory methods - in other words- assume no safety stock).
a. find out the EOQ
b. Determine the average level of inventory
c. Determine the reorder point
d. Compute the Total Cost of Inventory
Please show work for each of the problems.