Question
A small copy center uses approximately 27 boxes of copy paper a week. Experience suggests that usage can be well approximated by a normal distribution
A small copy center uses approximately 27 boxes of copy paper a week. Experience suggests that usage can be well approximated by a normal distribution with a standard deviation of 7 box per week. 4 weeks are required to fill an order for letterhead stationery. Ordering cost is $4, and annual holding cost is $0.37 per box. The manager's desired service level is 0.7. Assume a year is 52 weeks. How much is the annual demand rate? How much is the optimal order quantity? (keep two decimal places) How many times a year the copy center place a new order of papers? (keep two decimal places) How many weeks does each order of paper last? Compute the total annual cost of ordering and carrying boxes of papers: What is the Z value for the desired service level? How much safety stock is needed to provide the desired service level? What is the ROP for the desired service level?
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