Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Please note in this problem the EOQ is the same as ELS. So you will use the EOQ formula question a. Peachy Keen, Inc, makes
Please note in this problem the EOQ is the same as ELS. So you will use the EOQ formula question a. Peachy Keen, Inc, makes mohair sweaters, blouses with Peter Pan collars, pedal pushers, poodle skirts, and other popular clothing styles of the 1950s. The average demand for mohair sweaters is 100 per week. Peachy's production facility has the capacity to sew 400 sweaters per week. Setup cost is $351. The value of finished goods inventory is $40 per sweater. The annual per-unit inventory holding cost is 20 percent of the item's value. a. What is the economic production lot size (ELS)? b. What is the average time between orders (TBO)? C. What is the total of the annual holding cost and setup cost? d. What is the total annual cycle inventory cost? e. If there is a proposed capacity plan of 450 in the future which is better? The ELS (also known as the EOQ) or the future plan? f. What would be the difference in the TBO for the future plan
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