1 a grocery store carries a particular brand of coffee that, Ask an Expert

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1. A grocery store carries a particular brand of coffee that has the following characteristics:

Sales = 8 cases per week

Ordering cost = $10 per order

Carrying charge = 20 % per year

Item cost = $80 per case

a. How many cases should be ordered at a time?

b. How often will coffee be ordered?

c. What is the annual cost of ordering and carrying coffee?

d. What factors might cause the company to order a larger or smaller amount than the EOQ?

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