Question: Answer the following questions about applying the EOQ model for inventory control: 1. A specialty coffeehouse sells Colombian coffee at a fairly steady rate of

Answer the following questions about applying the EOQ model for inventory control: 1. 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. a. Determine the optimal order quantity for Colombian coffee. b. What is the time between placement of orders? c. What is the average annual cost of holding and setup due to this item? d. If replenishment lead time is three weeks, determine the reorder level based on the on-hand inventory. 12. A large automobile repair shop installs about 1,250 mufflers per year--18 percent of which are for imported cars. All the imported car mufflers are purchased from a single local supplier at a cost of $18.50 each. The shops use a holding cost based on a 25 percent annual interest rate. The setup cost for placing an order is estimated to be $28. a. Determine the optimal number of imported car mufflers the shop should purchase each time an order is placed, and the time between placement of orders. b. If the replenishment lead time is six weeks, what is the reorder point based on the level of on-hand inventory? c. The current reorder policy is to buy imported car mufflers only once a year. What are the additional holding and setup costs incurred by this policy

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