Montegut Manufacturing produces a product for which the annual demand is 10,000 units. Production averages 100 per day, while demand is 40 per day. Holding costs are $2.00 per unit per year; set -up costs $200.00. 

• If they wish to produce this product in economic batches, what size batch should be used? 
• What is the maximum inventory level? 
• How many order cycles are there per year? 
• How much does management of this good in inventory cost the firm each year?

Answer rating: 100% (QA)

Calculation of Economic production quantity SORT 2 x Annual Demand ... View the full answer