Q$2$: EOQ$]$ You are managing the inventory of coffee for Trojan Cafe. Your historical data shows that on average

each of your customers drinks $1$ kilogram of coffee every year, and you have $500$ customers. Coffee is stored in a

special temperature$-$controlled area, and you estimate the holding cost for coffee per kilogram of coffee per year

to be $30\%$ of its $($per$-$kilogram$)$ purchase cost. Every time you place an order for coffee from your suppliers, there

is an upfront cost of $$14($regardless of the amount ordered$),$ and then the charge is $$0\mathrm{.}75$ per kilogram. Your

supplier is quick, and the time between when you place an order and when you receive it is negligible.

Suppose the demand for coffee is exactly $500$ kilograms per year. You would like to minimize the sum of your

ordering and holding costs, while satisfying all of your demand.

a$)$ How much coffee should you order every time you place an order?

b$)$ How often should you order coffee?

c$)$ What is the time between orders?

d$)$ Suppose you order $275$ kilograms each time you ordered. What would be your annual$-$inventory related cost?

What would be the cost$-$penalty of not ordering the EOQ?

Wrong submission $=$ No credit. You may resubmit as late submission $($See policy in syllabus$).$

Combine$/$submit all your work in ONE FILE in the correct order to avoid $50\%$ penalty.