Find most economical batch quantity and total inventory cost


The annual demand for a certain part is 2000 units per year. The part is produced in a batch model manufacturing system. Annual holding cost per piece is $3.00. It takes 2 hours to set up the machine to produce the part, and cost of system downtime is $150/hr. Determine (a) the most economical batch quantity for this part and (b) the associated total inventory cost.

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Mechanical Engineering: Find most economical batch quantity and total inventory cost
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