Question: A coffee roaster in Austin TX has opened a retail store in Dallas TX. The plant manager in Austin wishes to optimize the inventory costs

A coffee roaster in Austin TX has opened a retail store in Dallas TX. The plant manager in Austin wishes to optimize the inventory costs of the companys 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 300 bags per day. The cost to prepare the equipment to start a production run is $400 and the annual inventory carrying cost is $0.9 per year.

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