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5.1/ Bell Technologies stocks and sells its own brand of laptop computers. It costs the firm $543
each time it places an order with the manufacturer for laptops. The cost of carrying one laptop in
inventory for a year is $210. The store manager estimates that total annual demand for the
computers will be 1,800 units with a constant demand rate throughout the year. Bell’s policy is
never to have stockouts of the store-brand laptop. The store is open for business seven days per
week from 9 a.m. to 6 p.m. Determine the following:
a. Optimal order quantity per order
b. Minimum total annual inventory costs
c. The number of orders per year
d. The time between orders (in working days)

5.4/ Mitch’s body shop uses a highly flammable solvent. It must have the product delivered by
special cargo trucks designed for the safe shipment of chemicals. The delivery cost for the
solvent is $1,200 each time an order is placed. The solvent is packaged in one-gallon plastic
containers. The cost of holding the chemical in storage is $120 per gallon per year. The annual
demand for the chemical, which is constant over time, is 1,783 gallons per year. The lead time
from time of order placement until receipt is 14 days. The company operates 250 working days
per year. Compute the optimal order quantity, total minimum inventory cost, and reorder point.

5.9/ The SBX Bookstore at The Ohio State University purchases from a vendor jackets
emblazoned with the Ohio State logo. The vendor sells the jackets to the store for $43 dollars per
jacket. The cost to the bookstore for placing an order is $150, and the annual carrying cost is 22
percent of the cost of a jacket. The bookstore manager estimates that 2,500 jackets will be sold
during the year. The vendor has offered the bookstore the following all unit volume discount
schedule:
Order Size Discount
1–299 0%
300–499 2
500–799 4
800+ 5
The purchasing manager wants to determine the bookstore’s optimal order quantity, given this

quantity discount information.

5.10/ Determine the optimal order quantity of jackets and total annual cost in exercise 5.9 if the
carrying cost is a constant $13 per jacket per year.

5.11/ The purchasing manager for Medco Research Laboratory orders letterhead forms and
stationery from an office products firm in boxes of 500 sheets. The company uses 5,000 boxes
per year. Annual carrying costs are $4.50 per box, and ordering costs are $34. The following all
unit discount price schedule is provided by the office supply company:
Order Quantity (boxes) Price per Box
200–999: $13
1,000–2,999: $12
3,000–4,999: $11
5,000+: $10
Determine the optimal order quantity and the total annual inventory cost.