What is the inventory holding cost per year of coffee

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Reference no: EM131800200

Question: Powered by Coffee (PBK.) is a new campus coffee store. PBK uses 50 bags of whole bean coffee every month, and demand is steady throughout the year. PBK has signed a contract to purchase its coffee from a local supplier, Phish Roasters, for a price of $25 per bag and an $85 fixed cost for every delivery independent of the order size. PBK incurs an inventory holding cost of 24 percent per year. If PBK orders 200 bags at a time, what is its inventory holding cost per year?

Reference no: EM131800200

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