Compute the total annual cost using your order size

Assignment Help Operation Management
Reference no: EM13927751

A large law firm uses an average of 40 boxes of copier paper a day. The firm operates 260 days a year. Storage and handling costs for the paper are $ 30 a year per box, and it costs approximately $ 60 to order and receive a shipment of paper.
a. What order size would minimize the sum of annual ordering and carrying costs?
b. Compute the total annual cost using your order size from part a.
c. Except for rounding, are annual ordering and carrying costs always equal at the EOQ?
d. The office manager is currently using an order size of 200 boxes. The partners of the firm expect the office to be managed in a cost efficient manner. Would you recommend that the office manager use the optimal order size instead of 200 boxes? Justify your answer.

Reference no: EM13927751

Questions Cloud

What additional annual cost is the shop incurring by staying : What additional annual cost is the shop incurring by staying with this order size? Other than cost savings, what benefit would using the optimal order quantity yield?
What is the expected return of the portfolio : Consider the following information: Rate of Return If State Occurs State of Probability of Economy State of Economy Stock A Stock B Stock C Boom .17 .352 .452 .332 Good .43 .122 .102 .172 Poor .33 .012 .022 −.052 Bust .07 −.112 −.252 −.092 Requiremen..
Discretionary financing accounts include : Discretionary financing accounts include all of the following EXCEPT
Calculate the expected return for the two stocks : Consider the following information: Rate of Return if State Occurs State of Probability of State Economy of Economy Stock A Stock B Recession .24 .055 –.44 Normal .64 .135 .34 Boom .12 .330 .57 Requirement 1: Calculate the expected return for the two..
Compute the total annual cost using your order size : What order size would minimize the sum of annual ordering and carrying costs? Compute the total annual cost using your order size from part a.
What is the expected return on the portfolio : You own a portfolio that has $1,900 invested in Stock A and $3,000 invested in Stock B. Assume the expected returns on these stocks are 8 percent and 14 percent, respectively. Required: What is the expected return on the portfolio? (Do not round inte..
What is the average number of bags on hand : Determine the economic order quantity What is the average number of bags on hand? How many orders per year will there be?
Determine the percentage of items in each category : Given the monthly usages in the following table, classify the items in A, B, and C categories according to dollar usage Determine the percentage of items in each category and the annual dollar value for each category for part b.
What was average real risk-free rate over this time period : You’ve observed the following returns on Crash-n-Burn Computer’s stock over the past five years: 12 percent, –9 percent, 20 percent, 17 percent, and 10 percent. What was the average real risk-free rate over this time period?

Reviews

Write a Review

Operation Management Questions & Answers

  What is the probability that biotech will develop vaccine

Team 1 has a 82 percent chance of success, team 2 an 93 percent chance of success, and team 3 a 96 percent chance. What is the probability that BioTech will develop the vaccine?

  Describe the role that the cdc

Describe the role that the CDC and the United States Department of Health and Human Services (HHS) play in the matters of infectious disease, airborne and foodborne pathogens, and public health.

  Why did gm enter through a joint venture with saic

Why did GM enter through a joint venture with SAIC? What are the benefits of this approach? What are the potential risks here?

  Performance for similar activities

A point of comparison of performance that represents best practices and performance for similar activities either in or outside the organization can be referred to as a (n)

  Illustrate entire company''s efforts to the company''s mission

Illustrate the actions you would take to closely align the entire company's efforts to the company's mission. Analyze how you could apply two theories of motivation that are proven to help individuals and teams achieve objectives.

  Supply chain for prospective organization

What is the supply chain for your prospective organization? Where does your organization bring value in this supply chain? Who are your main partners and suppliers? What are their locations? What is your contingency plan?

  Identify and explain the stages of contract formation

Maria, who lives in Seattle, sent Koji a letter via first class mail, stating, "Koji, I think your 2003 Ford SUV is worth $20,000. I will give you $20,000 cash for it."

  Identifies which alternative goleb transport must take

Identifies which alternative Goleb transport must take. The market for the repair could be either favourable (event1) or unfavourable (event2). George has constructed a payoff matrix showing the expected returns of every alternative also the probab..

  Which methods would be useful for this purpose

Think of a leader you admire. What traits does this person have? Are they consistent with the traits discussed in this chapter? If not, why is this person effective despite the presence of different traits?

  Information on indicidual verus group decision making

Conduct an internet search for information on indicidual verus group decision making. Then, compare and contrast individual and group decision-making. What are the advantages of each? Are there certain decisions that are better suited to individual d..

  Can the corporations be held liable

Agents and employees of Apples Corporation and Oranges Corporation are convicted of conspiring to violate a federal law that is punishable by a term of imprisonment and a fine. Can the corporations be held liable for these crimes? If so, how can t..

  How might eco laundry benefit by adopting a franchise model

What are some of the issues that caused Phillipe Christodoulou to create Eco Laundry. How does Eco Laundry differentiate itself from other Laundromats

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd