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9.) One of the products sold by Office Max is a Hewlett-Packard LaserJet 299 printer. As purchasing manager, you have the following information for the
9.) One of the products sold by Office Max is a Hewlett-Packard LaserJet 299 printer. As purchasing manager, you have the following information for the printer: Average weekly demand (52 weeks per year): 60 printers Standard deviation of weekly demand: 12 printers Order lead time: 3 weeks Standard deviation of order lead time: 0 (lead times are constant) Item cost: $120 per printer Cost to place an order: $2 Yearly holding cost per printer: $48 Desired service level during reordering period: 99% (z = 2.33) A.) (*) What is the economic order quantity for the printer? B.) (**) Calculate annual ordering costs and holding costs (ignoring safety stock) for the EOQ. What do you notice about the two? C.) (**) Suppose OfficeMax currently orders 120 printers at a time. How much more or less would OfficeMax pay in holding and ordering costs per year if it ordered just 12 printers at a time? Show your work
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