CARPHONE' is a company which produces cellphones. A cellphone requires a battery in its construction. The...

    

 

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"CARPHONE' is a company which produces cellphones. A cellphone requires a battery in its construction. The annual demand for battery is 35,000 units. The cost of each battery is $20 and each battery costs $6 per year to carry in inventory (i.e. I=0 and W=6). (Assume multi-product case and that items are immediately available after manufacturing). (a) If the cost of placing an order for batteries is $20, what is the Economic Order Quantity ? (5 points). (b) The company has the capability of producing batteries internally. It estimates a setup cost of $350 per production run. The production rate of batteries would be 5000 units per month. What is the Economic Manufacturing Quantity ? (5 points). (c) Should the company produce batteries internally or continue purchasing from outside sources ? Why or why not ? (5 points). "CARPHONE' is a company which produces cellphones. A cellphone requires a battery in its construction. The annual demand for battery is 35,000 units. The cost of each battery is $20 and each battery costs $6 per year to carry in inventory (i.e. I=0 and W=6). (Assume multi-product case and that items are immediately available after manufacturing). (a) If the cost of placing an order for batteries is $20, what is the Economic Order Quantity ? (5 points). (b) The company has the capability of producing batteries internally. It estimates a setup cost of $350 per production run. The production rate of batteries would be 5000 units per month. What is the Economic Manufacturing Quantity ? (5 points). (c) Should the company produce batteries internally or continue purchasing from outside sources ? Why or why not ? (5 points).

Answer rating: 100% (QA)

Siven data Annual demand D 30000 uniti y 3D 10 Junit Unit ost 3 J... View the full answer