Determine the total costs of ordering and holding inventory

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Reference no: EM1388425

A large law firm uses an average of 25 boxes of copier paper a day. The firm operates 250 days a year. Storage and handling costs for the paper are $20 a year per box, and it costs approximately $100 to order and receive a shipment of paper.Determine the total costs of ordering and holding inventory for the year to see how much could they save by ordering the EOQ amount when they order paper once a week.

Annual Demand= 25*250 = 6250

EOQ= Sqr(2*100*6250 / 20)= 250 units

Reference no: EM1388425

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