Quantity minimizes pbk ordering and holding costs per year

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Reference no: EM131800195

Question: Powered by Coffee (PBK) is a new campus coffee store. PBK uses 50 bags of whole bean coffee every month, and demand is steady throughout the year. PBK has signed a contract to purchase it's from a local supplier, Phish Roasters, for a price of $25 per bag and an $85 fixed cost for every delivery independent of the order size. PBK incurs an inventory holding cost of 24 percent per year. What order quantity minimizes PBK's ordering and holding costs per year?

Reference no: EM131800195

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