Question
ETS manufactures a component for its computer products. The annual demand for this component is 2500 units. The annual cost of maintaining inventory is 10%
ETS manufactures a component for its computer products. The annual demand for this component is 2500 units. The annual cost of maintaining inventory is 10% per unit and the cost of preparing an order and setting up production for the order is $ 50. The machine used to make this part has a production rate of 10,000 units per year and the cost is $ 22 per unit. B. How many batches will be produced per year? C. What is the maximum inventory level? D. What is the total cost per year? E. A supplier offers to sell a similar component for $ 25 per unit with a charge $ 5 per service per order. Should the company accept the offer? F. Find the average inventory level for each situation
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started