Reference no: EM133931779

Problem

Economic Production Quantity (EPQ): A skateboard manufacturer uses 30,000 wheel trucks a year (2 trucks per skateboard) in year 1. The firm has automated machining and assembly operations that can produce wheel trucks at a rate of 360 per weekday (no Saturday or Sunday operations). The Carrying costs are estimated to be $1.00 per wheel truck per year and set-up costs for the machining center and assembly operations are $60. Considering that the plant operates 250 days per year, calculate the Optimum Order Quantity (Qopt) and the Maximum inventory (IMAX). Get the instant assignment help. Refer to page 204 in Sanders for EPQ and Imax examples. In 5 years the annual demand is expected to double while production set-up costs have increased by 10%, and Carrying costs have doubled. Calculate the new Optimum Order Quantity (Qopt) and Maximum inventory (IMAX).