Klauss Manufacturing produces a product for which the annual demand is 10,000 units. Production averages 100 units per day, 200 days per year. Holding costs are $2.00 per unit per year, and setup cost is $200.00.
(a) If the firm wishes to produce this product in economic batches, what size batch should be used -Q*-?
(b) What is the maximum inventory level?
(c) How many order cycles are there per year?
(d) What are the total annual holding and setup costs?
Expert Answer
D = 10,000, H = $2, S = $200, p = 100/day, d = 10000/200=50/day
EPQ = √[(2*100000*200)/2(1-50/100)]=2000
Production time = Q/p
OR
PayPal Gateway not configured
OR
PayPal Gateway not configured