The manager of the Quick Stop Corner Convenience Store (which never closes) sells four cases of Stein beer each day. Order costs are $8.00 per order, and Stein beer costs $.80 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 5 percent of the cost of the beer.
If he were to order 16 cases of Stein beer at a time, what would be the length of an order cycle?
A) .25 days
B) 3 days
C) 1 day
D) 4 days
E) 20 days

Question

Quizplus · Accepted Answer

The order cycle length is calculated by dividing the order quantity by the daily demand. Ordering 16 cases with a daily demand of 4 cases results in an order cycle of 4 days (16 cases / 4 cases per day = 4 days).

The Manager of the Quick Stop Corner Convenience Store (Which