The manager of the Quick Stop Corner Convenience Store (which never closes)sells four cases of Stein beer each day.Order costs are $20.00 per order,and Stein beer costs $8.00 per six-pack (each case of Stein beer contains four six-packs).Orders arrive three days from the time they are placed.Daily holding costs are equal to five percent of the cost of a Stein beer case. If he were to order 16 cases of Stein beer at a time,what would be the average inventory level?
A)4 cases
B)12 cases
C)8 cases
D)20 cases
E)16 cases

Question

Quizplus · Accepted Answer

The average inventory level is calculated by taking the order quantity and dividing it by 2, assuming constant demand and a uniform usage rate. If the manager orders 16 cases at a time, the average inventory level would be 16 / 2 = 8 cases.

The Manager of the Quick Stop Corner Convenience Store (Which