(1) An architect firm uses an average of 60 boxes of copier paper a day. The firm operates 280 days a year. Storage and handling costs for the paper are $30 a year per box, and its costs approximately $60 to order and receive a shipment of paper. (a) What quantity order size would minimize the total annual inventory cost? ________________________________________________________________________________ (b) Determine the minimum total annual inventory cost. ________________________________________________________________________________ (c) The office manager is currently using an order size of 300 boxes. The partners of the firm expect the office to be managed "in a cost-efficient manner." Would you recommend the manager to use your quantity from part (a) rather than 300 boxes? _______. Justify your answer (by determining the total annual inventory cost for 300 boxes):
(1) An architect firm uses an average of 60 boxes of copier paper a day. The firm operates 280 days a year.
Storage and handling costs for the paper are $30 a year per box, and its costs approximately $60 to order
and receive a shipment of paper.
(a) What quantity order size would minimize the total annual inventory cost?
________________________________________________________________________________
(b) Determine the minimum total annual inventory cost.
________________________________________________________________________________
(c) The office manager is currently using an order size of 300 boxes. The partners of the firm expect the
office to be managed "in a cost-efficient manner." Would you recommend the manager to use your
quantity from part (a) rather than 300 boxes? _______.
Justify your answer (by determining the total annual inventory cost for 300 boxes):
_____________________________________________________________________________
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