Question: ABC Co. can manufactures a subcomponent at the rate of 700 per day when required. Its annual demand for this item is 80000 units. Assume 250 working days per year. Holding cost is $20 per unit per year. Set-up cost is 1000 per set-up. Find:
a) Economic production order quantity.
b) How many production runs will be made per year.
c) What will be the maximum inventory level.
d) What percentage of time during the year will this item be produced.
e) What is the annual cost for ordering and holding inventory.