Problem:
We have a production-order-quantity inventory system with a production rate of 400 units per day, a daily demand of 100 units per day, a production quanitty of 2400 units, and 300 days a year. The unit holding cost is $30 per year, the setup cost is $250 per production run, and the unit production cost is $120 per unit.
Required:
Question 1) The maximum inventory level is?
Question 2) The average inventory level is?
Question 3) The length of the prodution run is?
Question 4) The lenght of the inventory cycle is?
Question 5) The annual setup cost is $?
Question 6) The number of production runs per year is?
Question 7) The optimal production quantity is?
Question 8) The optimal annual holding cost is?
Solve the given numerical problem and illustrate step by step calculation.