A large ?rm uses an average of 40 boxes of copier paper per day. The ?rm operates 260 days a year. Storage and handling costs for the paper are $30 a year per box, and it costs approximately $60 to order and receive a shipment of paper.
How many times an order has to be placed to meet demand?
Except for rounding, are annual ordering and carrying costs always equal at the EOQ?
The office manager is currently using an order size of 200 boxes. The partners of the ?rm expect the office to be managed in a cost-efficient manner. Would you recommend that the office manager use the optimal order size instead of 200 boxes? Justify your answer.