A small copy center uses approximately 25 boxes of copy paper a week. Experience suggests that usage can be well approximated by a normal distribution with a standard deviation of 9.0 box per week. 2.0 weeks are required to fill an order for letterhead stationery. Ordering cost is $3.00, and annual holding cost is $0.50 per box. The manager's desired service level is 0.80. Assume a year is 52 weeks.
How much is the "annual" demand rate?
How much is the optimal order quantity? (keep two decimal places)
How many times a year the copy center place a new order of papers? (keep two decimal places)
How many weeks does each order of paper last?
Compute the total annual cost of ordering and carrying boxes of papers.
What is the Z value for the desired service level?
How much safety stock is needed to provide the desired service level?
What is the ROP for the desired service level?
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