Montegut Manufacturing produces a product for which the annual demand is 10,000 units. Production averages 80 units per day, while demand is 60 units per day. Holding costs are $5.00 per unit per year, and setup cost is $200.00. (a) If the firm wishes to produce this product in economic batches, what size batch should be used? (b) What is the maximum inventory level? (c) How many order cycles are there per year? (d) What are the total annual setup and holding costs?

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The Answer of Montegut Manufacturing produces a product for which the annual demand is 10,000 units. Production averages 80 units per day, while demand is 60 units per day. Holding costs are $5.00 per unit per year, and setup cost is $200.00. (a) If the firm wishes to produce this product in economic batches, what size batch should be used? (b) What is the maximum inventory level? (c) How many order cycles are there per year? (d) What are the total annual setup and holding costs?

Montegut Manufacturing Produces a Product for Which the Annual Demand