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6. [20 points] Central University uses 12,000 toner cartridges for laser printers in the student computer labs each year. Following information is provided by
6. [20 points] Central University uses 12,000 toner cartridges for laser printers in the student computer labs each year. Following information is provided by the purchasing director regarding toners. Ordering costs = $62.50/order Holding costs = $6/unit/year Lead-time = 1 week Unit cost = $80/unit Number of weeks labs are opened per year = 40 weeks a. The university currently orders once each four weeks during its 40-week academic year. What is the total cost of ordering and holding these goods under this system? b. How many toner cartridges should the purchasing director order at one time to minimize the total annual cost of purchasing and carrying? (What is the EOQ?) c. When should the cartridges be ordered? (What is the reorder point?) d. What is the cost of ordering and holding goods using the EOQ? How does it compare to the cost in (a)? e. The university decides to keep 1 week's demand as safety stock to buffer the uncertainty in supply. What is the safety inventory? How does the EQO and Reorder point change with safety stock? f. What is the cost of ordering and holding goods if safety inventory is kept?
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