3) A company produces a part that is used in its production process. The company produces thepart at a rate of 300 units per day. The daily demand for the product is 180 units. The annualdemand for the part is 54,000 units and occurs consistently over the 300 days that the companyoperates yearly. The company incurs a setup cost of $300 each time the item is produced. Thecost of carrying the item in inventory is estimated to be 25 percent of the item's $100 cost. Howmany units should the company produce each production run to minimize its inventory-associated costs?

EPQ- Economic production quantity helps us to find the quantity to be produced in each batch/run…

Answered: 3) A company produces a part that is…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 33P: Assume the demand for a companys drug Wozac during the current year is 50,000, and assume demand...

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