The information technology department of State University buys paper for its c

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    The information technology department of State University buys paper for its copier machine frequently. The office manager would like to
    determine the best quantity to order each time an order is placed. She has estimated that the ordering cost is $12 each time an order is placed. The monthly
    demand for paper is 135 reams (500 sheets to a ream). The cost of paper is $6.50 per ream and the carrying cost is 25 percent of the paper cost per month.
    Base your answers to the following questions on the economics that are provided and using the traditional inventory models we have studied.

    a) How many reams should be ordered at a time?

    b)Suppose the information technology department of the university only has
    space to hold 35 reams of paper at any time. How many reams should be ordered at a time? Why?

    c) There are 350 working days per year and the lead time is 3 days. What are the reorder point and the inventory position immediately after
    placing the order?

    d) If the university were to order at least 60 reams of paper every time it places an order the paper company will lower the price of the
    paper by $0.33 for all reams of paper. The university can now acquire all of the storage space that it needs. However it will cost the university an
    additional $1.00 per ream per month for storage. What is the difference in the annual inventory cost between this policy and the policy found in a)? Consider
    all relevant costs.

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