What is annual cost of carrying inventory of boxes of paper

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Reference no: EM132231958

1. A large law firm uses an average of 47 boxes of copier paper per day. The firm operates 260 days per year. Storage and handling costs for the paper are $20 per year per box, and it costs $55 to order and receive a shipment of paper.

What is the annual cost of carrying inventory of boxes of paper?

2. Ray’s Satellite Emporium wishes to determine the optimal order size for its best-selling satellite dish (Model TS111). Ray has estimated the monthly demand for this model to be 320 units. This model costs Ray $265 to purchase from his supplier. His annual cost to carry inventory is 10% and he estimates that orders cost $27 to process.

If Ray used an order quantity of 2000 instead of the optimal order quantity, how much money would he be wasting each year?

Reference no: EM132231958

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