Kushie's Coffee in Bangalore Is a Quaint Establishment Nestled near MG

question 80

Multiple Choice

Kushie's Coffee in Bangalore is a quaint establishment nestled near MG Road in the central business district. It serves coffee and fruit cake to a clientele that has been enjoying these products for over fifty years. The demand for coffee beans is 6600 cases per year (each case has 24 ten-pound bags) . It would be disastrous for them to run out of coffee, so they keep a safety stock of 30 cases. The cases cost $4800 and it costs $5 per case to order coffee. As coffee is a perishable product, the holding cost is fairly high at $40/case/year. The lead time to receive an order is seven days. Kushie's is open 300 days a year.
-What is their economic order quantity?

• A) 40.6 cases
• B) 162.5 cases
• C) 406 cases
• D) 1649.9 cases

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