Powered by Koffee (PBK) is a new campus coffee store. PBK uses 40 bags of...
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Powered by Koffee PBK is a new campus coffee store. PBK uses 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 $ per bag and an $ fixed cost for every delivery independent of the order size. The holding cost due to storage is $ per bag per month. PBK managers figure their cost of capital is approximately percent per month. a What is the optimal order size, in bags? Round the answer to decimal places. b Given your answer in a how many times a year does PBK place orders? Do not round intermediate calculations. Round the answer to the nearest whole number.
Powered by Koffee PBK is a new campus coffee store. PBK uses 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 $ per bag and an $ fixed cost for every delivery independent of the order size. The holding cost due to storage is $ per bag per month. PBK managers figure their cost of capital is approximately percent per month.
a What is the optimal order size, in bags? Round the answer to decimal places.
b Given your answer in a how many times a year does PBK place orders? Do not round intermediate calculations. Round the answer to the nearest whole number.
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