Ryerson Computer Furniture Inc. (RCF) manufactures a line of office computer chairs. The annual demand for the
Question:
Ryerson Computer Furniture Inc. (RCF) manufactures a line of office computer chairs. The annual demand for the chairs is estimated to be 5,000 units. The annual cost to hold one unit in inventory is 10 per year, and the cost to initiate a production run is 1,000. There are no computer chairs on hand, and RCF has scheduled four equal production runs of computer chairs for the coming year, the first of which is to be run immediately. RCF has 250 business days per year, sales occur uniformly throughout the year, and production start-up is within one day. RCRF is considering using the following formula for determining the economic order quantity (EOQ)
If RCF does not maintain a safety stock, the estimated total carrying costs for the computer chairs for the coming year based on their current schedule is_______________.