1. HAL Ltd. uses disk drive housings at a rate of = 720 units per...

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1. HAL Ltd. uses disk drive housings at a rate of λ = 720 units per year. The cost of purchasing each housing is c = $100 and the cost of initiating an order is K = $300. Assume an annual interest rate of I = 28 percent for determining the holding cost, and there is no order lead time. (a) Calculate the EOQ quantity Q and the corresponding maximum level of on-hand inventory H. (10 pts) (b) Now assume the disk drive housings are produced internally, instead of purchasing from an outsider supplier. The production rate is P = 1,440 units per year and the cost to initiate a production run is K = $300. All other information remains the same. For this finite production rate case, calculate the optimal quantity to produce in each cycle and the corresponding maximum level of on-hand inventory. (7 pts) (c) In (b), if the production rate P becomes infinite, how will your results change for the optimal order quantity Q and maximum on-hand inventory H? State your reason clearly. (3 pts) 1. HAL Ltd. uses disk drive housings at a rate of λ = 720 units per year. The cost of purchasing each housing is c = $100 and the cost of initiating an order is K = $300. Assume an annual interest rate of I = 28 percent for determining the holding cost, and there is no order lead time. (a) Calculate the EOQ quantity Q and the corresponding maximum level of on-hand inventory H. (10 pts) (b) Now assume the disk drive housings are produced internally, instead of purchasing from an outsider supplier. The production rate is P = 1,440 units per year and the cost to initiate a production run is K = $300. All other information remains the same. For this finite production rate case, calculate the optimal quantity to produce in each cycle and the corresponding maximum level of on-hand inventory. (7 pts) (c) In (b), if the production rate P becomes infinite, how will your results change for the optimal order quantity Q and maximum on-hand inventory H? State your reason clearly. (3 pts)

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Lets tackle each part of the question step by step a Calculate the EOQ quantity Q and the corresponding maximum level of onhand inventory H Economic O... View the full answer