Problem: Economic Order Quantity.
A large consulting firm orders photocopying paper by the carton. The firm pays a $30 delivery charge on each order. The total cost of storing the paper, including forgone interest, storage space, and deterioration, comes to about $1.50 per carton per month. The firm uses about 1,000 cartons of paper per month.
Order Size 100 200 250 500
Orders per month
Total orders cost
Average inventory
Total Carrying costs
Total carrying costs