Component Pte Ltd forecast demand for a component at around 1,250 units annually. They manufacture 10,000 units of the component a year with the following costs for each production run: - set up cost of $250 - variable cost of $15 a unit. - holding cost at 20 percent of value a year. Lead time is one month from receiving a production requisition until the unit is produced. 

What is the optimal variable cost?

Answer rating: 100% (QA)

To find the optimal variable cost for manufacturing the component you need to consider the Economic ... View the full answer