A specialty coffeehouse sells Colombian coffee at a fair rate of 300 kilograms annually. the beans are purchased from a local supplier for $3 per kilogram. the coffeehouse estimates that it costs $50 in paperwork and labor to place an order for the coffee, and holding costs are based on a 10 percent annual interest rate. a. determine the optimal order quantity for Coffee? b. what is the time between the placement of orders? C. what is the average optimal annual cost? d. Suppose the coffee is ordered in a box of 50kg each. how many boxes should the coffee shop order?
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- The Olde Town Microbrewery makes Townside beer,which it bottles and sells in its adjoining restaurant and bythe case. It costs $1700 to set up, brew, and bottle a batchof the beer. The annual cost to store the beer in inventory is$1.25 per bottle. The annual demand for the beer is 21,000bottles and the brewery has the capacity to produce 30,000bottles annually.a. Determine the optimal order quantity, total annual inventory cost, the number of production runs per year, andthe maximum inventory level.b. If the microbrewery has only enough storage space tohold a maximum of 2500 bottles of beer in inventory,how will that affect total inventory costs?Ram Roy's firm has developed the following supply, demand, cost, and inventory data. Supply Available Period Regular Time Overtime Subcontract Demand Forecast 1 30 15 5 40 2 30 15 5 45 3 30 20 5 50 Initial inventory 20 units Regular-time cost per unit $100 Overtime cost per unit $160 Subcontract cost per unit $200 Carrying cost per unit per month $4 Assume that the initial inventory has no holding cost in the first period and backorders are not permitted. Part 2 Allocating production capacity to meet demand at a minimum cost using the transportation method, the total cost is $enter your response here (enter your response as a whole number).Berry Computer is considering moving some of its operations overseas in order to reduce labor costs. In the United States, its main circuit board costs Berry $75 per unit to produce, while overseas it costs only $65 to produce. Holding costs are based on a 20 percent annual interest rate, and the demand has been a fairly steady 200 units per week. Assume that setup costs are $200 both locally and overseas. Production lead times are one month locally and six months overseas.a. Determine the average annual costs of production, holding, and setup at each location, assuming that an optimal solution is employed in each case. Based on these results only, which location is preferable?b. Determine the value of the pipeline inventory in each case. (The pipeline inventory is the inventory on order.) Does comparison of the pipeline inventories alter the conclusion reached in part (a)?c. Might considerations other than cost favor local over overseas production?
- The Union Street Microbrewery makes 1220 Union beer, which it bottles and sells in its adjoiningrestaurant and by the case. It costs $1,700 to set up, brew, and bottle a batch of the beer. Theannual cost to store the beer in inventory is $1.25 per bottle. The annual demand for the beer is18,000 bottles, and the brewery has the capacity to produce 30,000 bottles annually. Determine the optimal order quantity, the total annual inventory cost, the number of production runs per year, and the maximum inventory level.A mail-order house uses 16,870 boxes a year. Carrying costs are 60 cents per box a year, and ordering costs are $96. The following price schedule applies. Number of BoxesPrice per Box1,000 to 1,999$1.25 2,000 to 4,9991.20 5,000 to 9,9991.15 10,000 or more1.10 a.Determine the optimal order quantity. (Round your answer to the nearest whole number.) Optimal order quantity5000 boxes b.Determine the number of orders per year. (Round your answer to 2 decimal places.) Number of order per yearA specialty coffeehouse sells Colombian coffee at a fairly steady rate of 280 poundsannually. The beans are purchased from a local supplier for $2.40 per pound. The coffeehouse estimates that it costs $45 in paperwork and labor to place an order for thecoffee, and holding costs are based on a 20 percent annual interest rate.a. Determine the optimal order quantity for Colombian coffee.
- A mail-order house uses 17,460 boxes a year. Carrying costs are 60 cents per box a year, and ordering costs are $96. The following price schedule applies. Number of Boxes Price per Box 1,000 to 1,999 $1.25 2,000 to 4,999 1.20 5,000 to 9,999 1.15 10,000 or more 1.10 a. Determine the optimal order quantity. (Round your answer to the nearest whole number.) Optimal order quantity __________ boxes b. Determine the number of orders per year. (Round your answer to 2 decimal places.) Number of order _____________ per yearThe Big Buy Supermarket stocks Munchies Cereal. Demand for Munchies is 4,000 boxes peryear (365 days). It costs the store $60 per order of Munchies, and it costs $0.80 per box per yearto keep the cereal in stock. Once an order for Munchies is placed, it takes 4 days to receive theorder from a food distributor. Determine The optimal order sizeAn online footwear firm Shoe-n-co has four regional warehouses. Demand at each warehouse is normally distributed with a mean of 10,000 per week and a standard deviation of 2,000. Annual holding cost is 25%, and each unit of Prancs rubber shoes costs the company $10. Each order incurs an ordering cost of $1,000 (primarily from fixed transportation cost), and lead time is 1 week. The company wants the probability of stocking out to be no more than 5%. Assume 50 working weeks per year. What is the average inventory held at each warehouse? What is the annual inventory cost (holding + ordering) for Shoe-n-co? On average, how long does a unit of product spend in the warehouse before being sold? .. Little's law, maybe?
- An online footwear firm Shoe-n-co has four regional warehouses. Demand at each warehouse is normally distributed with a mean of 10,000 per week and a standard deviation of 2,000. Annual holding cost is 25%, and each unit of Prancs rubber shoes costs the company $10. Each order incurs an ordering cost of $1,000 (primarily from fixed transportation cost), and lead time is 1 week. The company wants the probability of stocking out to be no more than 5%. Assume 50 working weeks per year. Suppose that Shoe-n-co follows a periodic review policy with a review period of 2 weeks. Recall that the firm has four regional warehouses with demand at each warehouse that is normally distributed with a mean of 10,000 per week and a standard deviation of 2,000. Further, annual holding cost is 25%, and each unit of Prancs rubber shoes costs the company $10. Replenishment lead time is 1 week. The company wants a service level of 95%. Assume 50 working weeks per year. What is the annual…An online footwear firm Shoe-n-co has four regional warehouses. Demand at each warehouse is normally distributed with a mean of 10,000 per week and a standard deviation of 2,000. Annual holding cost is 25%, and each unit of Prancs rubber shoes costs the company $10. Each order incurs an ordering cost of $1,000 (primarily from fixed transportation cost), and lead time is 1 week. The company wants the probability of stocking out to be no more than 5%. Assume 50 working weeks per year. Suppose that Shoe-n-co follows a periodic review policy with a review period of 2 weeks. Recall that the firm has four regional warehouses with demand at each warehouse that is normally distributed with a mean of 10,000 per week and a standard deviation of 2,000. Further, annual holding cost is 25%, and each unit of Prancs rubber shoes costs the company $10. Replenishment lead time is 1 week. The company wants a service level of 95%. Assume 50 working weeks per year. Assuming that each…An online footwear firm Shoe-n-co has four regional warehouses. Demand at each warehouse is normally distributed with a mean of 10,000 per week and a standard deviation of 2,000. Annual holding cost is 25%, and each unit of Prancs rubber shoes costs the company $10. Each order incurs an ordering cost of $1,000 (primarily from fixed transportation cost), and lead time is 1 week. The company wants the probability of stocking out to be no more than 5%. Assume 50 working weeks per year. Assuming that each warehouse operates independently, calculate the ROP parameter of the optimal continuous review policy. Assuming that each warehouse operates independently, calculate the Q parameter of the optimal continuous review policy. How much safety stock does each warehouse have?