## Question

# A Coffee Shop orders 23,000 packages of cone filters for resale each year. They currently ordered in 1,000 package lots. The cost to order one

A Coffee Shop orders 23,000 packages of cone filters for resale each year. They currently ordered in 1,000 package lots. The cost to order one lot is $40. The per-unit holding cost is $8.

1. Enter the values for the company?s current parameters with a lot size of 1,000.

2. What is the Annual Cycle Inventory cost using a 1,000 lot size?

3. Referring to the Coffee Shop in Problem 2, what is the Economic Order Quantity (EOQ)?

4. Referring to the Coffee Shop in Problem 3, what is the yearly Time Between Orders? Time

## Parameters Current Lot Size (Q) Demand (D) Ordering Cost (S) Unit Holding Cost (H) Values Annual Costs Orders per Year Annual Ordering Cost Annual Holding Cost Annual Inventory Cost Values

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**Authors:** Willian M Pride, Robert J. Hughes, Jack R Kapoor

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