Provide answers in the tables. You can add more space in each row by hitting Enter or Return key.

1. What are the four primary reasons for holding inventory. In other words, what are the benefits of holding inventory? (2 points = 0.5*4 points)

Reasons	Explanation

1. Suppose you are running a caf; how would you classify inventory using ABC model? Give examples of items in each category? (3 points)

Class	Examples of items in each category
A
B
C

1. What are some examples of ordering and holding costs when running a caf? (2 point2)

Cost	Examples in a caf
Holding cost
Ordering cost

1. To be competitive, some cafes began to expand their product offerings. Although contributing to competitiveness, this has added to the complexity of operations, including inventory management. Specifically, in what ways does the expansion of product offerings create problems for inventory management? (1 point)

 

1. If your caf uses 40 packs of coffee per day and the caf operates 260 days a year. Storage and handling cost is $30 a year per pack and it costs $60 to order and receive a shipment of coffee. What is the optimal order quantity, i.e., EOQ? (Annual demand, D, will be consumption per day multiplied by number of days the caf operates, ). Compute the total annual and holding cost ( ) (2 points). For this question provide the whole process using formulas, equations, and answer. For more information on how to solve this problem, please watch the video.