. Powered by Koffee (PBK) is a new campus coffee store. PBK uses 50 bags of whole bean coffee every month, and demand is steady throughout the year. PBK has signeda 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. PBK incurs an inventory holding cost of 24% per year. a. If PBK orders 125 bags at a time, how many orders will it place per year?b. What is PBK’s annual inventory holding cost per bag? c. If PBK orders 200 bags at a time, what is its inventory holding cost per year? d. What order quantity minimizes PBK’s ordering and holding costs per year?If PBK chooses an order quantity to minimize ordering and holding costs, what is its ordering and holding costs per year expressed as a percentage of its annual purchase cost? A South American import/export company has offered PBK a deal. PBK can buy a year’s worth of coffee directly from South America for $20 per bag and a fixed cost for delivery of $1000. If PBK took this deal, what would be the sum of its purchasing, ordering, and holding costs per year?
. Powered by Koffee (PBK) is a new campus coffee store. PBK uses 50 bags of whole bean coffee every month, and demand is steady throughout the year. PBK has signeda 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.
PBK incurs an inventory holding cost of 24% per year.
a. If PBK orders 125 bags at a time, how many orders will it place per year?b. What is PBK’s annual inventory holding cost per bag? c. If PBK orders 200 bags at a time, what is its inventory holding cost per year? d. What order quantity minimizes PBK’s ordering and holding costs per year?If PBK chooses an order quantity to minimize ordering and holding costs, what is its
ordering and holding costs per year expressed as a percentage of its annual purchase
cost? A South American import/export company has offered PBK a deal. PBK can buy a
year’s worth of coffee directly from South America for $20 per bag and a fixed cost
for delivery of $1000. If PBK took this deal, what would be the sum of its purchasing,
ordering, and holding costs per year?
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