TASK-3 Using ELS technique calculate the required items

Mr. Zahir a production manager in a company want to determine the optimum lot size of a product that has a steady demand of 200 KG/day. The production rate for this product is 10,000 KG/day. Annual demand of this product is 500,000 KG. The set-up cost for the operation is SR 2,000 and annual holding cost is SR 0.02 per KG. The plant operates for 200 days in a year.

Calculate:

1. Economic Lot size (ELS) for the product
2. Total annual cost (Total set-up cost + Total annual holding cost)
3. Time between the orders (TBO) or Cycle length
4. Production time per lot