Illustrate what order quantity minimizes my total inventory

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Reference no: EM1374694

Q. My office consumes 500,000 specialized sheets of fine ivory paper every year. My office supplier can supply a maximum of 5000 sheets of that paper per day. Each paper costs $20. Processing an order is an involved and time consuming process and it costs $1500 to process each order. Storing this paper requires a specialized facility and holding costs are 32%. Assume a lead time of 1 week and that re are 250 working days in a year.

a. Illustrate what order quantity minimizes my total inventory costs?

b. Illustrate what is average inventory held during year?

c. Illustrate what is time between orders?

d. Illustrate what is reorder point?

e. Explain how many orders are placed in a year?

f. If it takes 0.5 cubic foot to store 1 sheet of paper, explain how large (in cubic feet) should storage space be to accommodate maximum quantity that I can hold?

Reference no: EM1374694

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