Question: here is what problem #10 from chapter 4 was Reconsider N&O: Chapter 4, #10, now allowing shortages to occur. Assume that if a customer arrives

 here is what problem #10 from chapter 4 was Reconsider N\&O:

here is what problem #10 from chapter 4 was

Chapter 4, \#10, now allowing shortages to occur. Assume that if a

Reconsider N\&O: Chapter 4, \#10, now allowing shortages to occur. Assume that if a customer arrives and the store is out of Columbian coffee, the customer's order is backlogged and he receives a discount of $0.01 per pound per day until receiving his order (note that the holding cost presented in the book is applied on an annual basis). a. What is the new optimal order quantity? b. What is the new time between placement of orders? c. What is the new total cost per unit time? 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) (1 point) Determine the optimal order quantity for Colombian coffee. b) (1 point) What is the time between placement of orders? c) (1 point) What is the average annual holding and fixed ordering cost due to this item? d) (1 points) If replenishment lead time is three weeks, determine the reorder level based on the on-hand inventory. (show your calculations)

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