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A manufacturer buys cardboard boxes from a supplier

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A manufacturer buys cardboard boxes from a supplier. The annual demand is 36,000boxes and is uniformly distributed. The boxes cost $4 each. The estimated order cost is $6, and the carrying cost rate is 30% per year. Now suppose the box supplier is located close to the manufacturer's plant. For any quantity ordered from the manufacturer, the supplier fills it by making daily deliveries of up to 200 boxes per day for as many days as it takes to fill the order. Both the manufacturer and the supplier use a 5-dat workweek. a. What is the economic order quantity and annual ordering and carrying cost?(Hint: Use EMQ) b. What is the manufacturer's annual savings in carrying cost by using this system instead of the one in problem?

Reference no: EM13661290

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