Question: Artwright Graphics uses a special-purpose paper in 80 per cent of its jobs. The paper is purchased in l00-sheet packages for $100 per package. Management

Artwright Graphics uses a special-purpose paper in 80 per cent of its jobs. The paper is purchased in l00-sheet packages for $100 per package. Management estimates the cost of placing and receiving a typical order to be $15 and the annual cost of carrying a package in inventory is $1.50. The firm uses 2600 packages each year and production is constant all year. The lead time to receive an order is one week. No safety stock is kept. The reorder point for the paper is:

a. 25 units.

b. 203 units.

c. 100 units.

d. 50 units.

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