Coffee Company uses 800 units of a product per year on a continuous basis. The product has a Fixed Cost of $50 per order, and its carrying cost is $2 per unit per year. It takes 5 days to receive a shipment after an order is placed, and the firm wishes to hold 10 days’ usage in inventory as a safety stock. Show Computations and Explanations.The EOQ = 200 UnitsThe Average Level of Inventory = 92 UnitsThe Reorder Point = 33 Units A. Indicate if the Variable Change if the firm does not hold the Safety Stock. Variable: Ordering Cost (Format: Change or Do not Change)B. Indicate if the Variable Change if the firm does not hold the Safety Stock. Variable: Carrying Cost (Format: Change or Do not Change)C. Indicate if the Variable Change if the firm does not hold the Safety Stock. Variable: Total Inventory Cost (Format: Change or Do not Change)

Given data Annual demand = 800 units Fixed cost (S) = $50 Carrying or holding cost (H) = $2 Lead…

Answered: Coffee Company uses 800 units of a…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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Coffee Company uses 800 units of a product per year on a continuous basis. The product has a Fixed Cost of $50 per order, and its carrying cost is $2 per unit per year. It takes 5 days to receive a shipment after an order is placed, and the firm wishes to hold 10 days’ usage in inventory as a safety stock. Show Computations and Explanations.