Minimize the sum of annual ordering and carrying costs

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Reference no: EM131471281

A large law firm uses an average of 38 boxes of copier paper a day. The firm operates 258 days a year. Storage and handling costs for the paper are $30 a year per box, and it costs approximately $58 to order and receive a shipment of paper.

a. What order size would minimize the sum of annual ordering and carrying costs? (Round your answer to the nearest whole number.)

Order size boxes

b. Compute the total annual cost using your order size from part a. (Round intermediate calculations and final answer to 2 decimal places. Omit the "$" sign in your response.)

Total annual cost $

c. Except for rounding, are annual ordering and carrying costs always equal at the EOQ?

Yes

d-1. The office manager is currently using an order size of 197 boxes. The partners of the firm expect the office to be managed "in a cost-efficient manner." compute total cost for this current order size. (Round intermediate calculations and final answer to 2 decimal places. Omit the "$" sign in your response.)

TC = $

Reference no: EM131471281

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