Charles Cycles produces bicycles and tricycles. The setup cost when switching production from one to the other

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Charles Cycles produces bicycles and tricycles. The setup cost when switching production from one to the other is $1,000. On average, retail customers order 150 tricycles per day (consider a 250 day year). The daily production rate for tricycles is 600 units. Unit cost of a tricycle is $60 and the company has determined inventory carrying cost to be 15%. What should the production order quantity be?

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Managing Operations Across the Supply Chain

ISBN: 978-0078024030

2nd edition

Authors: Morgan Swink, Steven Melnyk, Bixby Cooper, Janet Hartley

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