An Office Supply Store Open 5 Days a Week Must

question 25

Essay

An office supply store open 5 days a week must determine the best inventory policy for boxes of copier paper. Weekly demand is nearly constant at 250 boxes and when orders are placed, then entire shipment arrives at once. The cost per box is $22 and the inventory holding cost is 30%. Orders are placed at a cost of $40 each, including preparation time and communication charges, and the lead time is 2 days.
a.Find the optimal order quantity.
b.What is the reorder point?
c.How often should an order be placed?
d.What is the cycle time?

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Definitions:

Small Business

An independently owned and operated company that is limited in size and revenue, depending on the industry.

Direct SBA Loans

Loans provided directly by the Small Business Administration to small businesses that meet certain qualifications.

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A sudden and devastating event in nature, such as a hurricane, flood, or earthquake, that causes significant damage or loss.

Energy Conservation

The practice of reducing the use of energy through more efficient systems, processes, or behaviors to preserve resources.