Answer to Question #251172 in Economics for nastymarlian

Question

A company consumes 12000 units of a particular item. The company has a production capacity of 60 units/day. The cost of each unit produced by the company is $8. The setup and tooling up cost is $96 per setup. The carrying charges are 15 % of cost per unit. Determine

a) Economic quantity to be manufactured in each batch

b) How frequently should the production runs be made.

c) Determine the production period.

Assume 300 working days per annum

Answer 1

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