Minimize the sum of annual ordering and carrying cost

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Reference no: EM131115567

A large law firm uses an average of 38 boxes of copier paper a day. The firm operates 260 days a year. Storage and handling costs for the paper are $26 a year per box, and it costs approximately $62 to order and receive a shipment of paper.

a) what order size would minimize the sum of annual ordering and carrying cost?

b) compute the total annual cost using your order size from part a.

c) the office manager is currently using an order size of 196 boxes. The partners of the firm expect the office to be managed "in a cost-efficient manner." Compute total cost for this current order size.

Reference no: EM131115567

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