The New Office Supply Discounter,Paper Clips,Etc

question 36

Essay

The new office supply discounter,Paper Clips,Etc.(PCE),sells a certain type of ergonomically correct office chair that costs $300.The annual holding cost rate is 40% of the item cost,annual demand is 900 units,and the ordering cost is $20 per order.The lead time is 4 days.Because demand is variable (standard deviation of daily demand is 2.4 chairs),PCE has decided to establish a customer service level of 90%.The store is open 300 days per year.
(a)What is the optimal order quantity?
(b)What is the safety stock?
(c)What is the reorder point?

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Definitions:

Identifying Stakeholders

The process of recognizing individuals or groups that are affected by or can affect a project, business, or initiative.

PRSA Code Of Conduct

A set of ethical guidelines established by the Public Relations Society of America for professionals in public relations to follow.

Conflicts Of Interest

Situations in which an individual's personal interests could potentially interfere with their professional duties or responsibilities.

Trust With Clients

Refers to the confidence built between clients and their service providers, essential for establishing long-term relationships and ensuring client satisfaction.