Dazzle Graphics Uses a Special Purpose Paper on 80% of Its

Multiple Choice

Dazzle Graphics uses a special purpose paper on 80% of its jobs.The paper is purchased in 100- sheet packages at a cost of $100 per package.Management estimates that the cost of placing and receiving a typical order is $15, and the annual cost of carrying a package in inventory is $1.50. Dazzle uses 2,600 packages each year.Production is constant, and the lead time to receive an order is one week.(Assume 52 weeks in a year.) The reorder point is:

A) 25 packages.
B) 50 packages.
C) 100 packages.
D) 203 packages.
E) 225 packages.