You are running a very high end grocery store and the estimated weekly demand for ribeye is estimated to be D(p)=300-5p pounds, where p is the price per pound. The cost of purchasing one pound of rib-eye from your supplier is $15. Your store has enough capacity for 200 pounds of ribeye in special controlled temperature rooms. Maintaining these rooms costs you $2000 per year. Unfortunately, due to the high standards of your clientele, the meat can stay in your warehouse for at most one week. Shipping from your supplier costs $3 per pound with a fixed cost of $100 per shipment.

a. What is the optimal price? $39 per pound

b. How much are your annual Ordering (Setup) costs? 5,200

c. How much are you paying on purchasing the meat in a year? $81,900

d. Are you using your full warehouse potential in storing the ribeye? NO For the remaining questions assume that you keep the same price as in (a). You are considering an alternative business model where the meat can be stored by a company in shared rooms and charge you $2 per pound per year for storing. With this new business model

e. Did your purchasing or ordering cost change? We are sticking with the same ordering schedule (once a week).

f. How much do you pay in storage? $105

The answers are given but need to show the work that leads to the answer