Groundz Coffee Shop Uses 4 Pounds of a Specialty Tea

question 30

Essay

Groundz Coffee Shop uses 4 pounds of a specialty tea weekly;each pound costs $16.Carrying costs are $1 per pound per week because space is very scarce.It costs the firm $8 to prepare an order.Assume the basic EOQ model with no shortages applies.Assume 52 weeks per year,closed on Mondays.
a.How many pounds should Groundz order at a time?
b.What is total annual cost (excluding item cost)of managing this item on a cost-minimizing basis?
c.In pursuing lowest annual total cost,how many orders should Groundz place annually?
d.How many days will there be between orders (assume 312 operating days)if Groundz practices EOQ behavior?

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Definitions:

Secondary Reinforcer

Indicates any stimulus that has become reinforcing through its association with a primary reinforcer, often used in behavioral conditioning.

Probability

A measure of the likelihood that a particular event will occur, often expressed as a number between 0 and 1.

Operant Conditioning

a method of learning that uses rewards and punishments to influence behavior.

Classical Conditioning

A learning process in which a neutral stimulus becomes associated with a meaningful stimulus and acquires the capacity to elicit similar responses.