SmartBeans is Canada’s largest online retailer of fair-trade organic coffee, and imports coffee beans from several countries. SmartBeans operates 300 days a year and sells an average of 150 pounds of Harar (Ethiopia) Fair Trade Organic beans a day. After ordering, beans are always shipped from Ethiopia within exactly 11 days. Annual holding costs per pound are estimated to be 15% of the per pound cost of beans. The ordering cost is $35 per order. The cost of a pound of green coffee beans is $7.
What is the economic order quantity (EOQ) for Harar Fair Trade Organic coffee beans? What is the average inventory? What is the expected total number of orders per year?