A large law firm uses an average of 480 boxes of copier paper a day. The firm operates 250 days a year. Storage and handling costs for the paper are $30 a year per box, and it costs approximately $20 to order and receive a shipment of paper.
a. What order size would minimize the sum of the annual ordering and carrying costs.
b. Compute the annual carrying cost using your order size derived from above.
c. What is the inventory cycle time
d. What is the average inventory level throughout the year?
e. How many orders will there be in a year?