1) The Kaneohe Trading Company makes a fastener that they use in another process. The firm operates 263 days per year and uses the fasteners at a fairly steady rate of 230 per day. Fasteners can be produced at a rate of 800 per day. Annual storage costs is $3.90 per fastener and setup cost to produce more fasteners is $135.
What is the economic run quantity?
2) The Kaneohe Trading Company makes a fastener that they use in another process. The firm operates 309 days per year and uses the fasteners at a fairly steady rate of 107 per day. Fasteners can be produced at a rate of 730 per day. Annual storage costs is $1.80 per fastener and setup cost to produce more fasteners is $90.
What is the maximum inventory level?