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In which month should the batches be produced

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A manufacturing firm has a contract to supply lathe chucks as per the following schedule. The product made during a month will be supplied at the end of the month. The setup cost is Rs. 1000/-, while the inventory carrying cost is Re. 1/- per piece per month. In which month should the batches be produced and of what size, so that the total of setup and inventory carrying cost arc minimized?

Month

Number of items

January

100

February

200

March

300

April

400

May

400

June

300

Reference no: EM131119391

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