Groundz Coffee Shop uses 4 pounds of a specialty tea weekly; each pound costs $16. Carrying costs are $1 per pound per week because space is very scarce. It costs the firm $8 to prepare an order. Assume the basic EOQ model with no shortages applies
Assume 52 weeks per year, closed on Mondays.
a. How many pounds should Groundz order at a time?
b. What is total annual cost (excluding item cost) of managing this item on a cost-minimizing basis?
c. In pursuing lowest annual total cost, how many orders should Groundz place annually?
d. How many days will there be between orders (assume 312 operating days) if Groundz practices EOQ behavior?
a. Q* = = 8. Groundz should order 8 pounds per order.
b. TC = ($8 ) + ($1 ) (52 ) = $208 + $208 = $416. The firm will spend $416 annually.
c. N = = 26. Groundz should order 26 times per year.
d. Days between orders will be 312/26 or approximately every 12 working days.
You might also like to view...
______________________________ is a liquidity measure that is calculated by subtracting current assets from current liabilities
Fill in the blank(s) with correct word
Audit committees are required to consist of only directors who are key officers of the company
a. True b. False Indicate whether the statement is true or false
A debt security ________.
A) represents a credit relationship with another company or governmental entity, and typically pays interest for a fixed period B) represents stock ownership in another company and sometimes pays dividends C) is a standardized contract between two parties to buy or sell an underlying security at a predetermined price on a specific date D) is a cash market transaction in which the ownership of the underlying asset is deferred until a specific date
Samaya arrives at work 15 minutes early every day. When Dillon arrives right on time each day, he notices that the boss has already given Samaya the best assignments. Dillon decides to start arriving 20 minutes early to try to get the better assignments. What Dillon is experiencing is ______.
A. classical conditioning B. operant conditioning C. social learning D. positive reinforcement