Question: Please help me solve problem 2, below is a picture of the answers to problem 1... Thank you! Problem 1-Points (40) A specialty coffee house
Please help me solve problem 2, below is a picture of the answers to problem 1... Thank you!
Problem 1-Points (40) A specialty coffee house sells Colombian coffee at a steady rate of 6,000 pounds annually. The beans are purchased from a local supplier for $3.00 per pound. The coffee house estimates that it costs them $75 in paperwork and labor to place an order for the coffee. Holding costs are based on a 30% annual rate. a. Determine the optimal order quantity for coffee. b. What is the time between placement of orders? c. What is the average annual inventory holding cost? d. What is the average annual ordering cost? Problem 2 - Points (40) Suppose the coffee from the above problem has a shelf life of 1 month. a. How often should orders be placed? b. What quantity should be ordered given the answer in part a? c. How much would this coffee house be willing to pay for a vacuum freezer that would store the coffee for up to 2 months? d. How about if it would keep the coffee for up to 4 months? Problem 1

Step by Step Solution
There are 3 Steps involved in it
1 Expert Approved Answer
Step: 1 Unlock
Question Has Been Solved by an Expert!
Get step-by-step solutions from verified subject matter experts
Step: 2 Unlock
Step: 3 Unlock
