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In a gear box manufacturing unit, bevel gears are required at a constant rate of 250 gears/day. The fixed cost or ordering cost is Rs
In a gear box manufacturing unit, bevel gears are required at a constant rate of 250 gears/day. The fixed cost or ordering cost is Rs 175 and cost of holding the bevel gears in Inventory is Rs 45/gear/month of 30 days. If the bevel gear is not available when required the penalty will be Rs 10/gear/day of delay. Determine the optimum ordering quantity, shortage quantity and cycle time. What will be the best policy if the cost becomes infinity?
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