Economic order quantity analysis


Problem: lan Gentry is the owner of a small company that produces electric scissors used to cut fabric. The  annual demand is for 8,000 scissors, and Ian produces the scissors in batches. On the average, Jan can produce 150 scissors per day, and during the production process, demand for scissors has been about 40 scissors per day. The cost to set up the production process is $100, and it costs Jan 30 cents to carry one pair of scissors for one year. How many scissors should Ian produce in each batch?

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Accounting Basics: Economic order quantity analysis
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