A factory with an annual production capacity of 145,000,000 boxes of cleaning cloths faces demand of 120,000,000 boxes of cleaning cloths a year. The boxes cost $6 each. Setup cost is $3, and holding cost is 10 percent of purchase cost per unit on an annual basis. What is the optimal yearly setup cost?  

Answer rating: 100% (QA)

We can use the Economic Order Quantity EOQ formula to determine the optimal yearly setup cost for the factory Given Information Annual demand D 120000... View the full answer