Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

need help with part d please. A gourmet coffee shop in downtown San Francisco is open 200 days a year and sells an average of

need help with part d please.
image text in transcribed
A gourmet coffee shop in downtown San Francisco is open 200 days a year and sells an average of 74 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 $4. Refer to the standard normal table for z-values. a) What is the economic order quantity (EOQ) for Kona coffee beans? pounds (round your response to the nearest whole number). b) What are the total annual holding costs of stock for Kona coffee beans? \$ (round your response to two decimal places). c) What are the total annual ordering costs for Kona coffee beans? \$ decimal places). (round your response to two d) Assume that management has specified that no more than a 1% risk of stockout during lead time is acceptable. What should the reorder point (ROP) be? pounds (round your response to two decimal places)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these General Management questions