An office supply store open five days a week must determine the best inventory policy for boxes of copier paper. Weekly demand is nearly constant at 210 boxes. When orders are placed, the entire shipment arrives at once. The cost per box is $29, and the inventory holding cost is 33%. Orders are placed at a cost of $43 each, including preparation time and communication charges, and the lead time is two days. (Assume the store operates 52 weeks per year.) (a) Find the optimal order quantity. (Round your answer to the nearest whole number.) (b) What is the total annual cost (in dollars)? (Round your answer to two decimal places.) $ (c) What is the reorder point? (d) What is the cycle time (in days)? (Round your answer to two decimal places.) days
An office supply store open five days a week must determine the best inventory policy for boxes of copier paper. Weekly demand is nearly constant at 210 boxes. When orders are placed, the entire shipment arrives at once. The cost per box is $29, and the inventory holding cost is 33%. Orders are placed at a cost of $43 each, including preparation time and communication charges, and the lead time is two days. (Assume the store operates 52 weeks per year.) (a) Find the optimal order quantity. (Round your answer to the nearest whole number.) (b) What is the total annual cost (in dollars)? (Round your answer to two decimal places.) $ (c) What is the reorder point? (d) What is the cycle time (in days)? (Round your answer to two decimal places.) days
Purchasing and Supply Chain Management
6th Edition
ISBN:9781285869681
Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Chapter16: Lean Supply Chain Management
Section: Chapter Questions
Problem 10DQ: The chapter presented various approaches for the control of inventory investment. Discuss three...
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