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Question 2
a) Arena Vending annually sells large quantities of soft drinks and beer in plastic cups with the name of the arena and the various team logos on them. The local container cup manufacturer that supplies the cups in boxes of 100 has offered arena management the following discount price schedule for the cups: The annual demand for the cups is 2.3 million cups (i.e. 23,000 boxes), the annual carrying cost per box of cups is $12, and the ordering cost is $320 per order. Determine the optimal order quantity (i.e. number of boxes per order) and minimum total annual inventory cost. (Your work should show the annual inventory costs for different possible order quantities as well as the theoretical optimum order quantity)
b) What is the difference between dependent and independent demand inventory items? Give examples of each type of demand for a washing machine such as Samsung or Electrolux.
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