Only question C, please.

(50 points) EOQ and Power-of-Two reorder intervals: Powered by Koffee (PBK) is a new campus coffee store. PBK uses 50 bags of whole bean Robusta coffee every month, and demand is steady throughout the year. PBK has signed a contract to purchase its coffee from a special supplier, Phish Roasters, for a price of $ 25 per bag and a fixed cost of $85 per order (for every delivery, independent of the order size). PK incurs an annual inventory cost rate of 24% per year, applied to the unit cost, further, there is an additional storage cost of $1 per bag per month. Assume that each month is equivalent to four working weeks. a) (12 points) EOQ: Determine the optimal amount of coffee PBK should order from its supplier in each order, and the corresponding reorder interval (1.e. the time between orders) in weeks. Calculate the annual holding and setup cost incurred by your EOQ ordering policy. b) (14 points) Power-of-two Ordering: Calculate a good reorder interval, the corresponding order quantity, and the annual holding and setup cost, if PBK wants the reorder interval to be a power-of-two in weeks, eg., 1, 2, 4, 8, 16, 32... weeks. Why is your reorder interval good? Why might a power-of-two reorder interval be used in practice? c) (24 points) Two-product System: Suppose PBK can also buy whole bean Arabica coffee from its supplier, Phish Roasters. Arabica coffee has half the caffeine of Robusta, a milder flavor, and Arabica coffee beans are considered to be of higher quality than Robusta. For simplicity, assume that sale of Arabica coffee does not affect the sale of Robusta coffee and that, in addition, PBK will use 25 bags of Arabica coffee every month. Phish Roasters' price for Arabica coffee is $35 per bag, with a fixed cost of $85 per order. However, if PK orders both Robusta and Arabica coffee concurrently, the total fixed cost per order is still $85 per order and not $85+85 per order. Joint ordering saves on the fixed order cost! PK still uses an annual inventory cost rate of 24% per year for each type of coffee with a $1/ bag, month extra storage cost. 1) (6 points) Calculate a power-of-two reorder interval for Arabica coffee. ii) (9 points) Would you advise PK to order Arabica and Robusta coffee beans independently using their respective EOQ or would you advise PK to coordinate orders for the two types of coffee beans? Show annual cost calculations to support your recommendation. 111) (9 points) In what way does a supply replenishment lead time (assumed to be a constant number of weeks) affect the EOQ model? In particular, what happens to the optimal order quantity (EOQ value) and reorder interval (T*) for Robusta coffee when its replenishment lead time is equal to two weeks? When (at what time epochs) will replenishment orders be placed? Calculate the value of the reorder point defined as the on-hand inventory level at which a replenishment order is triggered