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The unit cost of an engine is 3000 and there is a 30

Question - The unit cost of an engine is $3000 and there is a 30% interest rate associated with the holding cost. It takes 6 weeks for a replenishment order to be placed. Every time the facility has to setup to make these engines the manager estimates a setup cost of around $250,000. The cost of back orders is about $150,000 per year.

Jan	Feb	March	April	May	June	July	Aug	Sep	Oct	Nov	Dec
240	150	350	297	497	566	200	450	300	240	300	350

What is the annual demand of engines?

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Accounting Basics: The unit cost of an engine is 3000 and there is a 30

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Accounting Basics: The unit cost of an engine is 3000 and there is a 30

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