Question 1. A large Tampa law firm uses an average of 40 boxes of copier paper a day. The firm operates 260 days a year. Storage and handling costs for the paper are $30 a year per box, and it costs approximately $60 to order and receive a shipment of paper. Round to the nearest whole number a. What order size would minimize the sum of annual ordering and carrying costs (EOQ)? b. Compute the total annual cost using your order size from part a. c. Except for rounding, are annual ordering and carrying costs always equal at the EOQ? d. The office manager is currently using an order size of 200 boxes. The partners of the firm expect the office to be managed 'in a cost-efficient manner.' Would you recommend that the office manager use the optimal order size instead of 200 boxes? Justify your answer; you will need to determine the total cost difference between the EOQ and 200 boxes/order.

Question 1. A large Tampa law firm uses an average of 40 boxes of copier paper a day. The firm operates 260 days a year. Storage and handling costs for the paper are $30 a year per box, and it costs approximately $60 to order and receive a shipment of paper. Round to the nearest whole number a. What order size would minimize the sum of annual ordering and carrying costs (EOQ)? b. Compute the total annual cost using your order size from part a. c. Except for rounding, are annual ordering and carrying costs always equal at the EOQ? d. The office manager is currently using an order size of 200 boxes. The partners of the firm expect the office to be managed 'in a cost-efficient manner.' Would you recommend that the office manager use the optimal order size instead of 200 boxes? Justify your answer; you will need to determine the total cost difference between the EOQ and 200 boxes/order.

Purchasing and Supply Chain Management

6th Edition

ISBN:9781285869681

Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Chapter16: Lean Supply Chain Management

Section: Chapter Questions

Problem 10DQ: The chapter presented various approaches for the control of inventory investment. Discuss three...

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