A coffee roaster in Richardson has opened a retail store adjacent to the production plant. Theplant manager wishes to optimize the inventory costs of the company’s best-selling coffee. Theannual demand for the coffee is 36,000 bags and the plant works 240 days per yr. The plant canroast the coffee at a rate of 200 bags per day. The cost to prepare the equipment to start aproduction run is $200 and the annual inventory carrying cost is $3.6 per year.Use 2 decimal places in your calculations (if needed) and round your final answer to the closestwhole number.a. What should be the optimum quantity of coffee to produce?(show your work in the space below)b. What is the maximum inventory achieved during a production run?(show your work in the space below)c. How many production runs are needed to meet the annual demand?(show your work in the space below)d. What is the average inventory of coffee?(show your work in the space below)e. What is the minimum total annual cost of producing and storing the company’s best-sellingcoffee?(show your work in the space below)
Critical Path Method
The critical path is the longest succession of tasks that has to be successfully completed to conclude a project entirely. The tasks involved in the sequence are called critical activities, as any task getting delayed will result in the whole project getting delayed. To determine the time duration of a project, the critical path has to be identified. The critical path method or CPM is used by project managers to evaluate the least amount of time required to finish each task with the least amount of delay.
Cost Analysis
The entire idea of cost of production or definition of production cost is applied corresponding or we can say that it is related to investment or money cost. Money cost or investment refers to any money expenditure which the firm or supplier or producer undertakes in purchasing or hiring factor of production or factor services.
Inventory Management
Inventory management is the process or system of handling all the goods that an organization owns. In simpler terms, inventory management deals with how a company orders, stores, and uses its goods.
Project Management
Project Management is all about management and optimum utilization of the resources in the best possible manner to develop the software as per the requirement of the client. Here the Project refers to the development of software to meet the end objective of the client by providing the required product or service within a specified Period of time and ensuring high quality. This can be done by managing all the available resources. In short, it can be defined as an application of knowledge, skills, tools, and techniques to meet the objective of the Project. It is the duty of a Project Manager to achieve the objective of the Project as per the specifications given by the client.
A coffee roaster in Richardson has opened a retail store adjacent to the production plant. The
plant manager wishes to optimize the inventory costs of the company’s best-selling coffee. The
annual demand for the coffee is 36,000 bags and the plant works 240 days per yr. The plant can
roast the coffee at a rate of 200 bags per day. The cost to prepare the equipment to start a
production run is $200 and the annual inventory carrying cost is $3.6 per year.
Use 2 decimal places in your calculations (if needed) and round your final answer to the closest
whole number.
a. What should be the optimum quantity of coffee to produce?
(show your work in the space below)
b. What is the maximum inventory achieved during a production run?
(show your work in the space below)
c. How many production runs are needed to meet the annual demand?
(show your work in the space below)
d. What is the average inventory of coffee?
(show your work in the space below)
e. What is the minimum total annual cost of producing and storing the company’s best-selling
coffee?
(show your work in the space below)
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