Montegut Manufacturing produces a product for which the annual demand is 20,000 units. Production averages 120 units per day, while demand is 80 units per day. Holding costs are $6.00 per unit per year, and setup cost is $400.00.
(a) If the firm wishes to produce this product in economic batches, what size batch should be used?
(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?
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Montegut Manufacturing produces a product for which the annual demand is 20,000 units. Production av...
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