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a company orders and uses 2,880 boxes of office supplies. each order has a fixed shipping cost of $200 and an additional cost of $3 per box of office supplies. to store a box for a full year costs $5. what is the optimal number of orders the company should make each year? do not include units with your answer.

Sagot :

An approach employed by a business to reduce overall costs is economic order quantity to reduce production costs, this can be used to determine the ideal quantity. Using the formula 2(DS)H, where D represents the annual number of orders, S represents the cost per unit, and H represents the holding cost, one can get the ideal number of orders.

What is shipping cost?

Shipping costs are the upfront expenses incurred when delivering a product from a shelf in your store or warehouse to a customer's door. Shipping costs are the upfront expenses incurred when delivering a product from a shelf in your store or warehouse to a customer's door. These expenses may comprise, but are not limited to: Costs associated with boxes, packaging, tape, and stickers

The cost of employing a worker to pick, package, and send a package

The price of hiring a courier to pick up and deliver an item

When shipping overseas, the expense of import/export costs

Given that a business orders and utilizes 2880 boxes of office supplies, $200 for shipping each purchase, plus an additional $3 for each box of supplies, and $5 for storage fees.

each box.

The formula can be used to determine the optimal number of orders.

√2(D×S) H

We've got

S= (200+3) S=203, D=2880, and H=$5

Using the specified values in the formula above:

optimal number of orders=√2(D×S) H=√2× (2880×203)5=√1,169,2805≈483

Thus, 483 is about the optimum number of orders.

To know more about Economic quantity order, visit:

https://brainly.com/question/28347878

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