A specialty coffeehouse sells Colombian coffee at a fair rate of 300 kilograms annually. the beans are purchased from a local supplier for $3 per kilogram. the coffeehouse estimates that it costs $50 in paperwork and labor to place an order for the coffee, and holding costs are based on a 10 percent annual interest rate. a. determine the optimal order quantity for Coffee? b. what is the time between the placement of orders? C. what is the average optimal annual cost? d. Suppose the coffee is ordered in a box of 50kg each. how many boxes should the coffee shop order?

A specialty coffeehouse sells Colombian coffee at a fair rate of 300 kilograms annually. the beans are purchased from a local supplier for $3 per kilogram. the coffeehouse estimates that it costs $50 in paperwork and labor to place an order for the coffee, and holding costs are based on a 10 percent annual interest rate. a. determine the optimal order quantity for Coffee? b. what is the time between the placement of orders? C. what is the average optimal annual cost? d. Suppose the coffee is ordered in a box of 50kg each. how many boxes should the coffee shop order?

Purchasing and Supply Chain Management

6th Edition

ISBN:9781285869681

Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Chapter16: Lean Supply Chain Management

Section: Chapter Questions

Problem 10DQ: The chapter presented various approaches for the control of inventory investment. Discuss three...

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