Economic order quantity for harar fair trade organic coffee

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Reference no: EM132127300

SmartBeans is Canada’s largest online retailer of fair-trade organic coffee, and imports coffee beans from several countries. SmartBeans operates 300 days a year and sells an average of 150 pounds of Harar (Ethiopia) Fair Trade Organic beans a day. After ordering, beans are always shipped from Ethiopia within exactly 11 days. Annual holding costs per pound are estimated to be 15% of the per pound cost of beans. The ordering cost is $35 per order. The cost of a pound of green coffee beans is $7.

What is the economic order quantity (EOQ) for Harar Fair Trade Organic coffee beans? What is the average inventory? What is the expected total number of orders per year?

Reference no: EM132127300

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