Question

Problem 2-(15 pts.) The Dine Corporation is both a producer and user of brass couplings. The firm operates 350 days a year and uses the couplings at steady rate of 100 per day (daily demand). Coupling can be produced at a rate of 1000 per day. Annual storage cost is $2 per coupling and machine set up cost is $100 per run. Find: a- The production order quantity. b- The annual cost of inventory using the optimal production quantity. e- What is the inventory level 3 days after start of production run assuming zero initial inventory?

Answer 1

Ansuer 9iven that 350 days working days (w) 00 Units daily de mand (d) 1000 Units d ay Produ chon rate (P) $91unit ly ear H COSH Holding Cost (s) $100 set-uP order quantitJ a) The producHon 2XDX S EPA Y P-d x 10 0 x350 x100 1000 l000 -10 0 = 1964.34 Units G0 XF8 0t81 the optim fraduction The annu OF inventory Using Cost quantity &(I-d/p) 1964.3 I may 000 1768 43 Units CS Scanned with CamScanner

ima TOLa Cost 1467.93 x l00 X350 x lo 0 164 31 + 176ㅋ.93 1781.74 3549.67 Cs Scanned with CamScanner

level 3 cys 3 the joventfry Preductier what Stait oF after initi'a Yun inventery assuming gero (P-d Inventory level 3 (1000 -loo) 200 Units Cs Scanned with CamScanner