Calculate maximum inventory level

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Reference no: EM132191989

A company produces fertilizer in 50 pounds bags. Weekly demand is 100,000 pounds per week. They operate 50 weeks per year. They can produce 250,000 pounds per week. The set up cost is $200 and annual holding cost is $0.55 per bag. Currently, it produces fertilizer in batches of 1,000,000 pounds.

a) Calculate EPQ

b) Calculate maximum inventory level.

c) Calculate total annual cost.

Reference no: EM132191989

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