Gourmet Coffee (GC) is a specialty coffee shop that sells roasted coffee beans. It buys green beans, roasts them in its shop, and then sells about 150,000 pounds of coffee per year. Green beans cost $1.50 per pound. In addition, there is a shipping charge that GC pays its supplier according to the following schedule:

Quantity Shipped Shipping cost per pound

Less than 10,000 pounds $0.17

Less than 15,000 pounds $0.15

More than 15,000 pounds $0.13

GC estimates its cost of inventory is 15% per year. The administrative cost of placing an order (fax/phone/billing) and receiving the goods and so on is $50 per order. In addition, to receive a shipment into its shop GC rents a forklift for $350.

A) What is the optimal order quantity of beans for GC?

B) What is the total annual cost?