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A gourmet coffee shop in downtown San Francisco is open 2 0 0 days a year and sells an average of 7 6 pounds of

A gourmet coffee shop in downtown San Francisco is open 200 days a year and sells an average of 76 pounds of Kona coffee beans a day. (Demand can be assumed to be distributed normally with a standard deviation of 16 pounds per day). After ordering (fixed cost = $15 per order), beans are always delivered from Hawaii in exactly 4 days. Per-pound annual holding costs for the beans are $3. Assume that management has specified that no more than a 1% risk of stockout during lead time is acceptable. What is the annual holding cost of maintaining the level of safety stock needed to support a 1%risk?

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