For the Love of Beans

For the Love of Beans is a wholesaler of soy milk. Their most popular product is the Fresh and Cold Satin Soy Vanilla product that they source from an organic supplier. They then distribute the soy milk to small grocery markets where it is sold from the refrigerated case. Weekly demand is about 4,500 cases. A full time, salaried employee of For the Love of Beans has the responsibility for placing the orders for the soy milk from their supplier's commune and organic farm in rural Illinois.

Here are relevant data on the costs of shipping and handling from the commune to For the Love of Beans' warehouse. The warehouse is staffed by two full time, salaried employees. The costs include the usual ordering and handling costs from the commune. They also include the cost of refrigeration during storage in For the Love of Beans' warehouse, which includes a fixed component (mainly depreciation of the cooling equipment) and a variable component that depends on the number of cases in inventory.

-Cost per case: $120/case

-Shipping cost (for any size shipment): $290

-Estimated cost of labor to place and process order: $10

-Estimated cost of labor to place cases into warehouse: $2/case

-Estimated cost of labor to 'pick' case when sold: $2/case

-Fixed cost for refrigeration: $75/week

-Variable cost for refrigeration: $3/case/week

For the Love of Beans' annual cost of capital is 15%. Assume 50 weeks per year. Calculate the quantity that For the Love of Beans should use to order from their hippie suppliers.