Question

A copy

store uses an average of 30 boxes of copier paper per day. The store

operates 260 days a year. The storage and handling costs for the paper are

$25 a year per box and it cost approximately $50 to order and receive a

shipment of paper.

a

. What order size would minimize the sum of annual ordering and carrying

costs?

b

. Compute the total annual cost using your order size from part a.

c. Except for rounding, are annual ordering and carrying costs always equal

at the EOQ?

d. The manager is currently using an order size of 200 boxes. The partners

expect a lean, cost effective operation. Would you recommend the manager

use the optimal order size instead of 200 boxes? Justify your answer.

Answer #1

A large law firm uses an average of 50 boxes of copier paper a
day. The firm operates 260 days a year. Storage and handling costs
for the paper are $40 a year per box, and it costs approximately
$70 to order and receive a shipment of paper.
a. What order size would minimize the sum of annual ordering and
carrying costs?
b. Compute the total annual cost using your order size from part
a
c. Except for rounding, are...

SHOW ALL STEPS, FORMULAS, AND EXPLANATIONS
A large law firm uses an average of 40 boxes of copier paper a
day. The firm operates 260 days a year. Storage and handling costs
for the paper are $30 a year per box, and it costs approximately
$60 to order and receive a shipment of paper.
a. What order size would minimize the sum of
annual ordering and carrying costs?
b. Compute the total annual cost using your
order size from part...

A large law firm uses an average of 40 boxes of copier paper a
day. The firm operates 260 days a year. Storage and handling costs
for the paper are $30 a year per box, and its costs approximately
$60 to order and receive a shipment of paper. (a) What quantity
order size would minimize the total annual inventory cost?
______________________________________________________________________________
(b) Determine the minimum total annual inventory cost.
______________________________________________________________________________
(c) The office manager is currently using an order size...

In a large law firm, the demand for copier paper has normally
distributed with an average of 10 packages of a day with the
standard deviation of 2. Each package contains 500 sheets. The firm
operates 255 days a year. Holding cost for the paper is $1 per year
per package, and ordering cost is $10 per order.
a) What order quantity would minimize total annual ordering and
holding cost?
b) What is the total annual inventory cost associated with...

2. A service garage uses 8100 boxes of cleaning cloths a year.
Ordering cost is $30 and holding cost is $0.6 on an annual basis.
Please compute the following tasks using EOQ model. (a) The
economic order quantity based on EOQ model? (b) The total cost of
ordering and carrying? (c) Suppose the current order size is 500.
What additional annual cost is the company incurring by staying
with the order size 500?

A small copy center uses five 500-sheet boxes of copy paper a
week. Experience suggests that usage can be well approximated by a
normal distribution with a mean of five boxes per week and a
standard deviation of one-half box per week. Five weeks are
required to fill an order for letterhead stationery. Ordering cost
is $4, and annual holding cost is 30 cents per box.
Use Table.
a.
Determine the economic order quantity, assuming a 52-week year.
(Round your...

QUESTION 3:
(a) A Computer Store sells computer supplies. One of its
products is white paper for laser printers, stock number 2085511W.
The store buys the paper from a regional warehouse that has
delivery trucks that make daily rounds to all the customers in its
region. The store uses 40 boxes of the paper per day on a
5-day-per-week operation. The supplier charges the store $21.00 per
box and delivers 100 boxes of paper per day during the
replenishment periods....

Our home construction company still buys nails in 15-pound boxes
but now we use an average of 2505 boxes a year. Preparing an order
and receiving a shipment of nails involves a cost of $2.40 per
order. Annual carrying costs are $0.2 per bag.
What will be their total cost of ordering and carrying the
nails? (Include the pennies in your answer)

The office manager for the Gotham Life Insurance Company orders
letterhead stationery from an office products firm in boxes of 500
sheets. The company uses 6,500 boxes per year. Annual carrying
costs are $3 per box, and ordering costs are $28. The following
discount price schedule is provided by the office supply company:
Order Quantity (in boxes) Price per Box 200-999 $16 1000-2999 14
3000-5999 13 6000+ 12 a. Determine the optimal order quantity and
the total annual inventory cost....

1. A supermarket stocks Hostess Cakes. The demand for these
cakes is 6,000 boxes per year (365 days). It costs the store $100
per order, and $0.75 per box per year to keep the cakes in stock.
Lead time is 4 days. Determine the following: a) The EOQ. b) The
average inventory c) The optimal number of orders per year. d) The
annual cost of ordering and holding inventory.

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