Cartwright Graphics Uses a Special Purpose Paper on 80% of Its

question 7

Multiple Choice

Cartwright Graphics uses a special purpose paper on 80% of its jobs. The paper is purchased in 100-sheet packages at a cost of $100 per package. Management estimates that the cost of placing and receiving a typical order is $15, and the annual cost of carrying a package in inventory is $1.50. Cartwright uses 2,600 packages each year. Production is constant, and the lead time to receive an order is 1 week.
The reorder point is:

• A) 25 packages.
• B) 50 packages.
• C) 100 packages.
• D) 203 packages.
• E) 225 packages.

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Definitions:

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