An office supply store open 5 days a week must determine the best inventory policy for boxes
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Question:
An office supply store open 5 days a week must determine the best inventory policy for boxes of copier paper (working days=250). Annual demand is nearly constant at 2500 boxes and when orders are placed, then entire shipment arrives at once. The cost per box is $22 and the inventory holding cost is 30%. Orders are placed at a cost of $40 each, including preparation time and communication charges, and the lead time is 2 days.
a. Find the optimal order quantity. b. What is the reorder point? c. What is the total inventory cost? d. What is the cycle time?
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