Question: The book uses Sharp, Inc as an example for Examples 3-5. Change their numbers slightly so that D = 1000, setup cost is $10/order, they

The book uses Sharp, Inc as an example for

The book uses Sharp, Inc as an example for Examples 3-5. Change their numbers slightly so that D = 1000, setup cost is $10/order, they are open 300 days/year, and Holding cost per unit per year is $.50. They come up with Q* = 200 and TC = $100 for their model. Assume that Sharp, Inc now has the option of opening their own production facility in house. This facility could produce 10 units/day. Calculate the Q* and TC for this production model. Is it less expensive than the TC of $100 from the Instantaneous EOQ model? Write a sentence or two on the advantages of this new system

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