Find annual inventory carrying cost for paper

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Reference no: EM131919203

Question: Jiffy Print Shop, located close to a major university, does an enormous amount of printing of documents, papers, course packs, and dissertations for students and faculty. The shop uses an average of 20 cases of copy paper each day during the 320 days per year that it is open. Each case of paper costs $40.00. It conducts a count of its paper inventory at the end of every quarter of the year. Jiffy began the year with 1,200 cases of paper and at the end of each of the next four quarters had 800 cases, 1,050 cases, 950 cases, and 1,100 cases, respectively. Jiffy management has determined that its inventory carrying cost is 25 percent annually. What is Jiffy's average inventory for the year, inventory turnover rate, and annual inventory carrying cost for paper? Assuming that Jiffy expects demand for the next year to remain at an average of 20 cases per day, how long can Jiffy satisfy demand given its ending inventory (end of the fourth quarter) of 1,100 cases?

Reference no: EM131919203

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