OfficeHQ carries boxes of Disco floppy diskettes. Because the diskettes come in different formats, OfficeHQ has decided to use a periodic review policy, in which it places an order with Disco once every three weeks. Weekly demand for Disco diskettes at OfficeHQ averages 45 boxes. The lead time for delivery is approximately one week, and OfficeHQ desires a safety stock of 30 boxes. OfficeHQ uses an annual holding cost rate of 20%for the diskettes. If the inventory level at the time OfficeHQ places its next order with Disco is 55 boxes, determine its optimal order quantity.
Right this is the case of periodic review system
Demand D = 45 boxes per ...
Solution contains calculation of optimal quantity.