Question
Suppose Stanley's Office Supply purchases 90,000 boxes of pens every year. Ordering costs are $133.95 per order and carrying costs are $0.75 per box. Moreover,
Suppose Stanley's Office Supply purchases 90,000 boxes of pens every year. Ordering costs are $133.95 per order and carrying costs are $0.75 per box. Moreover, management has determined that the EOQ is 5,669.92 boxes.Note:The ordering costs and EOQ differ from problem 1.The vendor now offers a quantity discount of $0.03 per box if the company buys pens in order sizes of 10,000 boxes. Determine the before-tax benefit or loss of accepting the quantity discount. (Assume the carrying cost remains at $0.75 per box whether or not the discount is taken.)
Use the data from problem 2and a 365 day year.If the lead time for placing an order is 14 days, and Stanley's Office Supply holds a Safety Stock of 30 days Supply of Boxes of Pens, then at what inventory level in Boxes should an order be placed?Enter your answer rounded to two decimal places.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started