Annual Annual Product Production Holding cost ($ per unit per Set up cost ($) per Demand ($) year) order (units) A 1,500 $30,000 $11 $39 B 1,800 $45,000 $7 $20 C 1,900 $55,000 $5 $25

Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
Question

Calculate the economic production quantities for three products that use the same equipment. For each product, unit cost is based on material, production and overhead costs that sums $30 per unit. The company operates 290 days per year. The following table has the needed information:

Find the economic order quantity for each product (assume non-instantaneous receipt).

 

 

 

 

Annual
Annual
Product Production
Holding cost ($ per unit per
Set up cost ($) per
Demand ($)
year)
order
(units)
A
1,500
$30,000
$11
$39
B
1,800
$45,000
$7
$20
C
1,900
$55,000
$5
$25
Transcribed Image Text:Annual Annual Product Production Holding cost ($ per unit per Set up cost ($) per Demand ($) year) order (units) A 1,500 $30,000 $11 $39 B 1,800 $45,000 $7 $20 C 1,900 $55,000 $5 $25
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