Office Supplies, Inc. sells discounted office supplies over the Internet. One popular product sold is legal-size notepads, which are ordered by many law firms. Office Supplies offers the following quantity discount structure, based on how many dozen notepads are ordered: 1-19 dozen, $21.95 per dozen; 20-99, $19.95 per dozen; 100-199, $18.95 per dozen; 200+, $17.95 per dozen. A law firm would like to decide how many legal notepads to order using the EOQ model for quantity discounts. Its ordering cost is $35 per order, its anticipated need in the coming year is for 1,500 dozen notepads, and its annual carrying cost rate is 40% of acquisition cost. How many dozen notepads should they order each time? What would be the resulting total inventory cost per year (ordering plus carrying plus materials)?
Office Supplies, Inc. sells discounted office supplies over the Internet. One popular product sold is legal-size notepads, which are ordered by many law firms. Office Supplies offers the following quantity discount structure, based on how many dozen notepads are ordered: 1-19 dozen, $21.95 per dozen; 20-99, $19.95 per dozen; 100-199, $18.95 per dozen; 200+, $17.95 per dozen. A law firm would like to decide how many legal notepads to order using the EOQ model for quantity discounts. Its ordering cost is $35 per order, its anticipated need in the coming year is for 1,500 dozen notepads, and its annual carrying cost rate is 40% of acquisition cost. How many dozen notepads should they order each time? What would be the resulting total inventory cost per year (ordering plus carrying plus materials)?
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
