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Millennium Liquors is a wholesaler of sparkling wines. Their most popular product is the French Bete...

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General Management

Millennium Liquors is a wholesaler of sparkling wines. Theirmost popular product is the French Bete Noire which is shippeddirectly from France. Weekly demand is for 45 cases. Millenniumpurchases each case for $125, there is a $275 fixed cost for eachorder (independent of the quantity ordered) and their annualholding cost is 25 percent.

a.What order quantity minimizes Millennium’s annual ordering andholding costs?

b.If Millennium chooses to order 350 cases each time, what isthe sum of their annual ordering and holding costs? (Round youranswer to 2 decimal places.)

c.If Millennium chooses to order 125 cases each time, what isthe sum of the ordering and holding costs incurred by each casesold? per cases

d.If Millennium is restricted to order in multiples of 50 cases(e.g., 50, 100, 150, etc.) how many cases should they order tominimize their annual ordering and holding costs? cases

e.Millennium is offered a 5.00% discount if they purchase atleast 1,000 cases. If they decide to take advantage of thisdiscount, what is the sum of their annual ordering and holdingcosts?

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