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Nanonisa is a purchasing manager at Changloon Photocopy Company. She usually orders A4 papers in...

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Accounting

Nanonisa is a purchasing manager at Changloon Photocopy Company. She usually orders A4 papers in boxes of 500 sheets from a paper supplier. The company uses 150, 000 sheets in first six months and 20% more in another six months. Annual carrying costs are $3 per semi-annual and ordering costs are $28 per year. The following discount price schedule is provided by the paper supply company. Calculate:

Kuantiti Pesanan

Order Quantity (boxes)

Harga setiap kotak $

Price per box $
100-999 16
1000-2999 14
3000-5999 13
6000+ 12

a) The optimal order quantity.

b) What are the total annual inventory costs?

c) Based on answer (b) what will be the decision?

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