Compute minimum cost production lot size-maximum inventory

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Reference no: EM13834824

XYZ Co. manufactures bicycles. Demand for this year’s model is expected to occur at a constant annual rate of 7200 items. One bicycle costs $245. The holding cost is based on a 11% annual rate, and production setup costs are $340. The manufacturing plant has an annual production capacity of 12000 units. Acme has 310 working days per year, and the lead time for a production run is 4 days. Use the production lot size model to compute the following values: a) Minimum cost production lot size b) Number of production runs per year c) Cycle time d) Length of a production run e) Maximum inventory f) Total annual cost g) Reorder point

Reference no: EM13834824

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