Question
Daily demand for high-quality paper tablecloths at Anteater Products (AP), a company in the wholesale catering business, is 1000 tablecloths give or take (standard deviation)
Daily demand for high-quality paper tablecloths at Anteater Products (AP), a company in the wholesale catering business, is 1000 tablecloths give or take (standard deviation) 500 tablecloths. The tablecloths are supplied to AP by a wholesaler, Irvine Paper (IP). The price that IP charges AP for a case of 10,000 tablecloths is $5000, and IP sells only complete cases.
The delivery time for an order from IP averages 6 days. Each time an order is received at AP's warehouse, there is 3 hours of labor required to store and document the order at a cost of $100 per hour. According to the accounting department at AP, the company's cost of capital is 12%. In this problem, it may be assumed that there are 350 days in the year.
If AP orders 6 cases per order, what is the average tablecloth inventory level assuming they use a 96% service level? (Round to nearest number value.)
Group of answer choices:
2144 tablecloths
29580 tablecloths
31725 tablecloths
59161 tablecloths
61305 tablecloths
None of the answers is the correct answer.
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