Inventory Control Assignment (#4)

The Bird Watchers Digest (BWD) Publishing Company produces books for the retail market. Demand for a current book is expected to occur at a constant annual rate of 10000 copies. The cost of one copy of the book is $20.00. The holding cost is based on an 20% annual rate, and production setup costs are $150 per setup. The equipment with which the book is produced has an annual production volume of 20,000 copies. BWD has 250 working days per year, and the lead time for a production run is 15 days. Use the production lot size model to compute the following values:

1. Minimum cost production lot size
2. Number of production runs per year
3. Cycle time
4. Length of a production run
5. Maximum inventory
6. Total annual cost
7. Reorder point