Find out the economic run size and maximum inventory

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Q. A shop that makes candles offers a scented candle, which has a monthly Demand of 360 boxes. Candles can be produced at a rate of 36 boxes per day. The shop operates 20 days a month. Suppose that Demand is uniform throughout the month. Setup cost is $60 for a run also holding cost is $2 per box on a monthly basis.

Find out the following:
(A) the economic run size
(B) the maximum inventory
(C) the number of days in a run

The daily usage rate (u) is 18 boxes. The daily production rate (p) is 36 boxes.

 

Reference no: EM1375875

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