Average inventory of scented candles throughout the year

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Reference no: EM132185466

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. Assume that demand is uniform throughout the month. Setup cost is $60 for a run, and holding cost is $2 per box on a monthly basis.

Determine the following:

1) What should be the optimum quantity of scented candles to produce?

2) What is the maximum inventory achieved during a production run?

3) What is the average inventory of scented candles throughout the year?

4) What is the cycle time?

5) What is the length of a production run in days?

6) What is the total annual cost of producing and storing the scented candles?

Reference no: EM132185466

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