Q2. A specialty coffeehouse sells Colombian coffee at a fairly steady rate of 280 pounds annually. The beans are purchased from a local supplier for $2.40 per pound. The coffeehouse estimates that it costs $45 in paperwork and labor to place an order for the coffee, and holding costs are based on a 20 percent annual interest rate.
- Determine the optimal order quantity for Colombian coffee.
- What is the time between placement of orders?
- What is the average annual cost of holding and setup due to this item?
- If replenishment lead time is three weeks, determine the reorder level based on the on-hand inventory.
Q2. A specialty coffeehouse sells Colombian coffee at a fairly steady rate of 280 pounds annually. The beans are purchased from a local supplier for $2.40 per pound. The coffeehouse estimates that it costs $45 in paperwork and labor to place an order for the coffee, and holding costs are based on a 20 percent annual interest rate.
- Determine the optimal order quantity for Colombian coffee.
- What is the time between placement of orders?
- What is the average annual cost of holding and setup due to this item?
- If replenishment lead time is three weeks, determine the reorder level based on the on-hand inventory.
Q2. A specialty coffeehouse sells Colombian coffee at a fairly steady rate of 280 pounds annually. The beans are purchased from a local supplier for $2.40 per pound. The coffeehouse estimates that it costs $45 in paperwork and labor to place an order for the coffee, and holding costs are based on a 20 percent annual interest rate.
- Determine the optimal order quantity for Colombian coffee.
- What is the time between placement of orders?
- What is the average annual cost of holding and setup due to this item?
- If replenishment lead time is three weeks, determine the reorder level based on the on-hand inventory.