Suds’s Bottling Company does bottling, labeling, and distri-bution work for several local microbreweries. The demandrate for Wortman’s beer is 600 cases (24 bottles each) perweek. Suds’s bottling production rate is 2,400 cases per week,and the setup cost is $800. The value of inventory is $12.50per case, and the annual holding cost is 30 percent of theinventory value. Suds’s facilities operate 52 weeks each year.What is the economic production lot size?

Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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Suds’s Bottling Company does bottling, labeling, and distri-
bution work for several local microbreweries. The demand
rate for Wortman’s beer is 600 cases (24 bottles each) per
week. Suds’s bottling production rate is 2,400 cases per week,
and the setup cost is $800. The value of inventory is $12.50
per case, and the annual holding cost is 30 percent of the
inventory value. Suds’s facilities operate 52 weeks each year.
What is the economic production lot size?

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