Question: Alter Templar is trying to use inventory models for his stores. He has 4 stores in Philadelphia that sell printer papers. The City Hall store
Alter Templar is trying to use inventory models for his stores. He has stores in Philadelphia that sell printer papers. The City Hall store sells packets a day; the North Philadelphia store sells packets a day; the Whitman Plaza store sells packets a day, and the University City store sells packets a day. All of Alter's stores operate days a year. It costs Alter $ per packet of paper from the supplier. Alter sells them for $ Alter's inventory carrying cost is of the unit cost per year. Alter does not see any variability in either demand or supplier's lead time.
Suppose Alter's supplier charges him $ in order processing and delivery charges every time he places an order. Each of Alter's stores determines their order quantities separately.
a What is the EOQ for the City Hall Store? packets.
b What is the EOQ for the North Philadelphia Store? packets.
c What is the EOQ for the Whitman Plaza Store? packets.
d What is the EOQ for the University City Store: packets.
Alter is thinking about consolidating his orders. The vendor tells him that if he orders together for multiple stores, Alter will have to pay $ in order processing and delivery charges for the first store, and then $ for every additional store in the order. Suppose Alter orders for all stores together.
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