Annual demand is 900 units cost to produce the unit is 250, Operation Management

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Annual demand is 900 units cost to produce the unit is 250

Annual demand is 900 units. Cost to produce the unit is $250, carrying cost is 10% per year. The manufacturer recently reduced the setup cost from $200 to $12.50. What is his new EOQ? If the company’s goal is to move to a single piece lot size, what would the setup cost need to be?

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Operation Management: Annual demand is 900 units cost to produce the unit is 250

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Operation Management: Annual demand is 900 units cost to produce the unit is 250

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