Essay
Holstein Computing manufactures an inexpensive audio card (Audio Max)for assembly into several models of its microcomputers.The annual demand for this part is 100,000 units.The annual inventory carrying cost is $5 per unit and the cost of preparing an order and making production setup for the order is $750.The company operates 250 days per year.The machine used to manufacture this part has a production rate of 2000 units per day.
(a)Calculate the optimum lot size.
(b)How many lots are produced in a year?
(c)What is the average inventory for Audio Max?
(d)What is the annual holding and setup cost for Audio Max?
Correct Answer:
Verified
(a)Q*p = 
= = 6123.7 or 6124 units.
(b)...View Answer
Unlock this answer now
Get Access to more Verified Answers free of charge
Correct Answer:
Verified
= = 6123.7 or 6124 units.(b)...
View Answer
Unlock this answer now
Get Access to more Verified Answers free of charge
Q49: An inventory decision rule states,"When the inventory
Q50: Perform an ABC analysis on the following
Q53: Which of these statements about the production
Q54: The annual demand for an item is
Q55: Which of the following is NOT one
Q98: A firm that makes electronic circuits has
Q130: A(n) _ system triggers inventory ordering on
Q202: In the EOQ model, for a given
Q225: A bakery wants to determine how many
Q228: What are the assumptions of the EOQ