Sells discounted office supplies over the internet

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Reference no: EM131718720

Office Supplies, Inc. sells discounted office supplies over the Internet. One popular product sold is legal-size notepads, which are ordered by many law firms. Office Supplies offers the following quantity discount structure, based on how many dozen notepads are ordered: 1-19 dozen, $21.95 per dozen; 20-99, $19.95 per dozen; 100-199, $18.95 per dozen; 200+, $17.95 per dozen. A law firm would like to decide how many legal notepads to order using the EOQ model for quantity discounts. Its ordering cost is $35 per order, its anticipated need in the coming year is for 1,500 dozen notepads, and its annual carrying cost rate is 40% of acquisition cost. How many dozen notepads should they order each time? What would be the resulting total inventory cost per year (ordering 2 plus carrying plus materials)? (Go through the steps and explain how you reached your decision)

Reference no: EM131718720

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