Evaluate economic order quantity assuming a week year

Reference no: EM1378614

Q. A small copy center uses five 500 sheet boxes of copy paper a week. Experience suggests which usage can be well approximated by a normal distribution with a mean of 5 boxes per week also a standard deviation of one-half box per week. Two weeks are required to fill an order for letterhead stationery. Ordering cost is $ 2.00 also annual holding is 20 cents per box

A) Evaluate economic order quantity, assuming a 52 week year

B) If copy center reorders when supply on hand is 12 boxes, compute risk of a stock out.

c) If a fixed interval of seven weeks instead of ROP is used for reordering, illustrate what risk does copy center incur which it will run out of stationary before this order arrives if it orders 36 boxes when amount on hand is 12 boxes?

Reference no: EM1378614

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