Question: Powered by Koffee (EOQ + ROP) Powered by Koffee (PBK) is a new campus coffee store. PBK uses 50 bags of whole bean coffee every

Powered by Koffee (EOQ + ROP) Powered by Koffee (PBK) is a new campus coffee store. PBK uses 50 bags of whole bean coffee every month, and you may assume that demand is perfectly steady throughout the year. PBK has signed a year-long contract to purchase its coffee from a local supplier, Phish Roasters, for a price of $25 per bag and an $85 fixed cost for every delivery independent of the order size. The holding cost due to storage is $1 per bag per month. There is an additional holding cost due to the cost of capital, which PBK managers estimated at 2 percent per month.

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