An Office Manager Uses 400 Boxes of File Folders Per

question 68

Essay

An office manager uses 400 boxes of file folders per year. The price is $8.50 per box for an order size of 199 boxes or less, $8.00 per box for orders of 200 to 799 boxes, and $7.50 per box for an order of 800 or more boxes. Carrying cost is 20 percent of the price of the product and ordering costs are $80. What order quantity minimizes total annual cost?

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Definitions:

Factor-Comparison Method

A systematic approach in job evaluation, where jobs are compared based on key factors to establish relative worth.

Benchmark Jobs

Key positions within an organization used as a standard or reference to evaluate the value of other jobs or to establish pay scales.

Job Analysis

Is the process of gathering and organizing detailed information about various jobs within an organization so that managers can better understand the processes through which they are performed most effectively.

Consensus

A decision-making process that seeks unanimity, general agreement, or at least the absence of active opposition among members of a group.