Practical Management Science
Practical Management Science
6th Edition
ISBN: 9781337406659
Author: WINSTON, Wayne L.
Publisher: Cengage,
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A car rental agency uses 96 boxes of staples a year. The boxes cost $5 each. It costs $10 to order staples, and it costs $0.80 to hold a box of staples in inventory for 1 year.

A.) How many boxes of staples should the car rental company order each time it needs staples, to minimize the combined ordering and holding costs for staples?

B.) Using the order size that minimizes the car rental agency’s combined ordering and holding costs for staples, how long will a single order of staples last the agency, before it must receive more staples? (Assume there are 52 weeks in the year for the car rental agency.)

C.) Using the order size that minimizes the car rental agency’s combined ordering and holding costs for staples, how much does the car rental agency actually spend on holding costs for staples each year?

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