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Q5.13 (Algo) Powered by Koffee [5.6] Powered by Koffee (PBK) is a new campus coffee store. PBK uses 60 bags of whole bean coffee every
Q5.13 (Algo) Powered by Koffee [5.6] Powered by Koffee (PBK) is a new campus coffee store. PBK uses 60 bags of whole bean coffee every month, and you may assume that demand is perfectly steady throughout the year. PBK has signed a yearlong contract to purchase its coffee from a local supplier, Phish Roasters, for a price of $30 per bag and an $75 fixed cost for every delivery independent of the order size. The holding cost due to storage is $1 per bag per month. PBK managers figure their cost of capital is approximately 2 percent per month. (c) Given your answer in (a), how many months of supply of coffee does PBK have on average? (Round the answer to 2 decimal places.) (d) On average, how many dollars per month does PBK spend to hold coffee (including cost of capital)? (Round the answer to 2 decimal places.)
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