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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