Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Southern Office Supplies Inc. distributes office supplies to customers in the Southeast. One popular SKU is laser printer paper, Ordering costs are 143.00 per order.

image text in transcribed
image text in transcribed
Southern Office Supplies Inc. distributes office supplies to customers in the Southeast. One popular SKU is laser printer paper, Ordering costs are 143.00 per order. One ream of paper costs $4.00, and Souther uses a 20 percent annual inventory holding cost rate. The average annual demand is 15,000 reams and historical data shows that the standard deviation of weekly demand is about 70. The lead time from the manufacturer is 2 weeks. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. 1. What is the minimum-cost economic order quantity? Round your answer to the nearest whole number, reams 2. What is the annual ordering cost for the EOQ? Use the rounded EOQ value in your calculations. Round your answer to the nearest cont. $ 3. What is the annual inventory holding cost for the EOQ? Use the rounded tOQ value in your calculations. Round your answer to the nearest cont. $ 4. What is the total annual cost for the EOQ? Use the rounded to value in your calculations. Round your answer to the nearest cent $ 5. Assuming that there are 52 weeks in a year what is the average demand during the lead time? Round your answer to two decimal places reams 6. What is the standard deviation of demand during the lead time? Round your answer to two decimal places. reams 7. What is the safety stock with a 99 percent service level? Round your answer to two decimat places, reams 8. What is the reorder point with safety stock? Round your answer to the nearest whole number reams

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fundamental Financial Accounting Concepts

Authors: Thomas Edmonds, Christopher Edmonds

9th edition

9781259296802, 9781259296758, 78025907, 1259296806, 9781259296765, 978-0078025907

Students also viewed these Accounting questions