ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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5. A toy factory has an annual demand for 20,000 of tops. It cost $1.50 to store one top per year.
It costs $500 for each production set-up for these tops and $3.50 to manufacture a single top. Find
the total cost function.
fM
Total Cost of Production is: T(g) = :
+ gM +, where q is number of units per productionm run; k is cost of storing
2
one item per year; g is cost of manufacturing a single unit of the product; f is fixed set-up cost for a production run; M is
total demand of units per year.
Given Constants
Total Cost Function
Find the optimum number of tops per batch as well as the number of batches per year.
optimum number of tops
optimum number of batches
Find the total cost for this optimum production schedule.
Optimum Total Cost
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Transcribed Image Text:5. A toy factory has an annual demand for 20,000 of tops. It cost $1.50 to store one top per year. It costs $500 for each production set-up for these tops and $3.50 to manufacture a single top. Find the total cost function. fM Total Cost of Production is: T(g) = : + gM +, where q is number of units per productionm run; k is cost of storing 2 one item per year; g is cost of manufacturing a single unit of the product; f is fixed set-up cost for a production run; M is total demand of units per year. Given Constants Total Cost Function Find the optimum number of tops per batch as well as the number of batches per year. optimum number of tops optimum number of batches Find the total cost for this optimum production schedule. Optimum Total Cost
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