Roasted co?ee beans to customers to make into co?ee at home

Assignment Help Operation Management

Reference no: EM132245340

A co?ee shop sells bags of roasted co?ee beans to customers to make into co?ee at home. The demand for these bags is quite predictable (and can be treated as deterministic for our purposes). The shop sells 3,500 bags of co?ee beans per year. Each time the shop places an order for these bags with its co?ee supplier, it incurs an administrative cost of $15, independent of the quantity ordered. The company values each bag at $12.50 (this is the book value, not the selling price), and the company’s inventory carrying rate is 15% per year. For all but Part 1f, assume that the lead time is zero, i.e., orders are received immediately when they are placed.

Hypothetically, if the demand per year increased to 4,000 bags, would you expect the average cost per unit demanded to increase, decrease, or stay the same?

For this question, assume that there is a delay of 3 weeks between when the co?ee shop submits an order and when they receive it. What inventory level should the co?ee shop use as its reorder point?

Reference no: EM132245340

Questions Cloud

The availability of the technology represented in the film : How the film might have changed popular conceptions on the availability of the technology represented in the film.

Describe the project procurement planning process : Describe the project procurement planning process. Explain methods that can be used to mitigate the risks for each contract type.

What would the major in the georgia highway patrol : Do you think these repetitive stops are reasonable? Why or why not? What would be the reasoning behind the stops? Explain.

Hedge the interest-rate risk : What forward contract would you enter into to hedge the interest-rate risk on these bonds over the coming year?

Roasted co?ee beans to customers to make into co?ee at home : A co?ee shop sells bags of roasted co?ee beans to customers to make into co?ee at home.

Describe the tools associated with procurement management : Describe the tools and techniques associated with procurement management. Which of these tools, in your opinion, is the most effective and why?

What is holding period return : Javier sold the stock for $26.75 a share. What is his holding period return?

Provide a brief history of the sex offender notification : Provide a brief history of the sex offender notification/registration in the United States and explain the specific sex offender registration laws.

Examine the cash budgets of almost any organization : Examine the cash budgets of almost any organization, you would find distinct seasonal patterns of cash inflows and outflows.

User Account

All Pages