Question
The copy center at Foster consumes paper to provide the handouts to students in various courses. The demand for paper is 250 boxes each week.
The copy center at Foster consumes paper to provide the handouts to students in various courses. The demand for paper is 250 boxes each week. Each box costs $5, and each order placed with the supplier has a fixed cost of $75. It takes 2 weeks for the supplier to ship the order to the copy center. Annual holding cost is 25% of the dollar value of inventory. You may assume 50 weeks per year. a. What order quantity minimizes the copy center's total inventory related costs (i.e., holding and ordering costs)? b. What is the order cycle (i.e., the time between two consecutive orders placed with the supplier)?
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