This type of problem can be recognized when a production rate (p) and a usage rate (u) are given in addition to the basic EOQ information. Use Formula 12–5 to compute the optimal run quantity. Production (run) time is Q/p. Imax is (Q/p)(p – u). The time between the end of one run and the start of the next is (Imax)/u – setup time.

The Dine Corporation is both a producer and a user of brass couplings. The firm operates 220 days a year and uses the couplings at a steady rate of 50 per day. Couplings can be produced at a rate of 200 per day. Annual storage cost is \($2\) per coupling, and machine setup cost is \($70\) per run.

a. Determine the economic run quantity.

b. Approximately how many runs per year will there be?

c. Compute the maximum inventory level.

d. What is the average inventory on hand?

e. Determine the length of the pure consumption portion of the cycle.