Question: EPQ Model - Example 3 Electro Inc. produces integrated circuits (IC) for several clients. The IC is produced at a rate of 40 units per

EPQ Model - Example 3 Electro Inc. produces integrated circuits (IC) for several clients. The IC is produced at a rate of 40 units per day. The manufacturing cost is estimated to $3 per unit, while the holding cost is based on a 25% annual interest rate. It costs the company $50 to initiate a production run. The average demand for ICs is 50 units per week. Determine: a) Optimal size of a production run. b) Average annual cost of holding and setup c) Length of each production run d) The maximum level of the on-hand inventory of ICs? Would the solution be feasible if the setup time was 12 weeks

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related General Management Questions!

Electro Inc. produces integrated circuits (IC) for several clients. The IC is produced at a rate of 40 units per day. The manufacturing cost is estimated to $4 per unit, while the holding cost is...

IN NEED OF HELP is an example of an output of the transformation p recess. A) Information B) Material C) Intangible needs D) Satisfied customers Which of these statements about flows in a supply...

IN NEED OF HELP IN NEED OF HELP Assignments Name ts is best? 1) MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. Which of these statements A) An...

PEPSICO, INC.: COST OF CAPITAL "At PepsiCo Inc., cola was king, but it is quietly being dethroned." It was this lead sentence of a front-page article in the Wall Street Journal that had caught...

Required Question # 1 (40 marks, How has Pepsi Corporation performed over the 10-year time period from 1981 to 1990? In your critical discussion focus on qualitative and quantitative indicators....

m BD 1/24 PROJECT MUSE Indigenous Circuits: Navajo Women and the Racialization of Early Electronic Manufacture Lisa Nakamura American Quarterly, Volume 66, Number 4, December 2014, pp. 919-941...

SMU-11-0002 Educational material supplied by The Case Centre Copyright encoded A76HM-JUJ9K-PJMN9I Order reference F302540 r thee new marketting forecastss for this moonth's planninng Catthy Wong...

uantitative Analysis BA 452 Homework 3 Questions Homework 3 covers the theory and applications in Lessons I-6 and I-7. This document has four parts: Objectives of doing your homework. Assignment of...

4. Was it practical or plausible to reduce direct wafer fabrication by 34 per cent or 23m (answer in 500 words) The case study (23 pages uploaded in order) are as below. Please read through them to...

LIFT Elevator Company manufactures small hydroelectric elevators. One of the direct materials used is heavy-duty carpeting for the floor of the elevator. The direct materials quantity standard for...

(a) In Problem 10-22 how much is it worth to the firm to terminate the product after 1 year if the net revenues are negative? (b) How much does the ability to terminate early change the P (loss) and...

Which of the following is an overhead cost? Sales commissions Depreciation of factory buildings Depreciation of office equipment Direct materials used

As the manager of Smith Construction, you need to make a decision on the number of homes to build in a new residential area where you are the only builder. Unfortunately, you must build the homes...