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University of California, Los Angeles - MGMT 4102018 Flex FEMBA 410 Assignment 04 Key
- Exam (elaborations) • 3 pages • 2021
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Question 1 
A specialty coffee house sells Jamaican Blue Mountain Coffee at a fairly steady rate of 280 pounds 
annually. The beans are purchased from a local supplier for $2.40 per pound. The coffee house estimates 
that it costs $45 in paperwork and labor to place an order for the coffee and that holding costs are based 
on a 20% annual interest rate. 
D = 280 lb/yr 
C = $2.40 
S= $45i 
= 0.2 
Holding cost: H = iC = 0.2 x $2.40 = 0.48 $/lb 
(a) Determine the optimal order quantity for Jamaican...
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