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PBK is a campus coffee store that uses EOQ to manage its inventory of whole bean coffee, the demand for which is known to be a constant 1, 440 pounds/year. PBK's fixed cost associated with placing and receiving an order from its supplier is $18/order . Its purchase cost is $1/pound, and its estimated (unit) annual holding cost is $3.60 /pound/year (per pound per year). If the actual (unit) annual holding cost is really $6.40/pound/year and PBK could estimate it accurately (i. e., PBK knew the actual cost when making decision on order quantity), what is the optimal order quantity/size in pounds to minimize Annual Inventory Cost?
a. 120 b. 87 c. 90 d. 110 e. 78
Sagot :
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