Managing Supply Chain and Operations 1st Edition by Thomas Foster ,Scott Sampson,Cynthia Wallin,Scott Webb

Exercise 45

A company uses the finite replenishment model to determine the optimal quantity to produce. There are 250 days a year over which demand and production occur. The daily demand is 480, and the production rate is 800 per day. The setup cost for production is $600 per setup. Assuming that if the carrying cost is 20 percent of the item's $50 cost, what is the length, in days, of a production run if the company produces the replenishment quantity that minimizes its inventory-related costs?