Annual demand for a made-to-stock product is 60000 units, Management Theories

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Annual demand for a made-to-stock product is 60000 units

Question: Annual demand for a made-to-stock product is 60,000 units. Each unit costs $8.00, and the annual holding cost rate = 24%. Setup time to change over equipment for this product = 6 hr, and the downtime cost of the equipment $120/hr. Determine:

(a) economic order quantity and

(b) total inventory costs.

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Management Theories: Annual demand for a made-to-stock product is 60000 units

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