The Super Discount Store (Open 24 Hours a Day, Every

question 49

Essay

The Super Discount store (open 24 hours a day, every day) sells 8-packs of paper towels, at the rate of approximately 420 packs per week. Because the towels are so bulky, the annual cost to carry them in inventory is estimated at $.50. The cost to place an order for more is $20 and it takes four days for an order to arrive.
a.Find the optimal order quantity.
b.What is the reorder point?
c.How often should an order be placed?

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Definitions:

Net Domestic Product

The aggregate worth of every product and service generated inside a nation over a particular timeframe, deducting depreciation.

Gross Domestic Product

The total market value of all final goods and services produced within a country in a specific time period, indicating economic health.

Depreciation

Depreciation is the accounting process of allocating the cost of tangible assets over their useful lives, reflecting wear and tear or obsolescence.

Real GDP

The total value of all goods and services produced within a country in a year, adjusted for inflation, providing a more accurate reflection of an economy's size and growth rate.