Tina’s Coffee Emporium

A. Tina’s Coffee Emporium wishes to determine the best order size for its best‐selling Barista Espresso Maker by Gastroback (Model TS111).  Tina has estimated the annual demand for this model at 7,600 units.  Her cost to carry one unit is $100 per year per unit, and she has estimated that each order costs $20 to place.  Using the EOQ model, how many should Tina order each time?


B. With regard to the above inventory models, describe why you would use one model in

preference to the other.  Explain why we need more than one inventory model to forecast

ordering policy.

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