A large law firm uses an average of 51 boxes of copier paper per day. The...
A large law firm uses an average of 51 boxes of copier paper per day. The firm operates 260 days per year. Storage and handling costs for the paper are $21 per year per box, and it costs $49 to order and receive a shipment of paper.
On average, how many boxes of paper are in inventory? calculate to 4 decimal places
Homework Answers
Given are following data :
Annual demand of copier paper = D = 51 / day x 260 days = 13260
Ordering cost = Co = $49
Annual unit storage and handling cost = Ch = $21
Therefore,
Economic Order Quantity ( EOQ )
= Square root ( 2 x Co x D/ Ch )
= Square root ( 2 x 49 x 13260 / 21 )
= 248.75
Average number of boxes of paper in inventory = EOQ / 2 = 248.75/2 = 124.3750
|
AVERAGE NUMBE ROF BOXES OF PAPER IN INVENTORY = 124.3750 |
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