Question

A gourmet coffee shop in downtown Vancouver is open 200 days a year and sells an average of 75 pounds of Kona coffee beans a day. Demand is assumed to be normally distributed with a standard deviation of 15 pounds per day. Ordering cost is $16 per order. Beans arrive from Hawaii in exactly four days of placing the order. Annual holding cost for the beans is $3 per pound.

a. 4500
b. 3980
c. 3589
d. 4340

Answer 1

The provided question lacks details necessary for calculations related to inventory control and EOQ, but it gives insight into the volatility of global coffee prices and their impact on producers and consumers.

Step-by-step explanation:

The question seems to require an understanding of operations management, particularly inventory control and the calculation of economic order quantity (EOQ), but no such calculation or related details are provided in the question. Instead, the provided information pertains to the fluctuation of coffee prices in the global market and the impact these fluctuations have on coffee-producing families. The coffee industry is depicted as highly volatile, with prices subject to dramatic changes over the years. This volatility impacts not only the global economy but also the local economies and livelihoods of those relying on coffee as their primary source of income. Furthermore, the information mentions an event where consumers faced a significant price increase, similar to what happened with the Netflix service in 2011.