Question 9 1 pts Buy-A-Lot has backrooms in each of their 5 central New Jersey s

Question

Question 9 1 pts Buy-A-Lot has backrooms in each of their 5 central New Jersey stores where they store stock. Each store currently keeps 20 bottles of a popular hair care product as safety stock. Each bottle costs $8.95 and the annual holding cost is 16%. The district manager wants to pool the safety stock in a single centralized location. How many bottles of product can the manager SAVE in safety stock? Choose ] $28.64. $492.25 20 bottles. $402.75 55 bottles 45 bottles. $64.44 80 bottles. $78.76 What is the holding cost savings?

Explanation / Answer

Currently, the number of bottles = 20*5 = 100

As per revised norm, it will be 20 bottles at one location. So, 100-20 = 80

Ans 80 bottle saving

The holding cost saving = Number of bottle saving*Bottle cost*Holding cost % = 80*8.95*16% = 114.56$

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