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Q. Stan fawcetts company is considering producing a gear assembly that it now purchases from salt lake supply, inc. salt lake supply charges $4 per unit with a minimum order of 3000 units. Stan estimates that it will cost 15,000 to set up the process and then 1.82 per unit for labour and materials.
A. Draw a graph illustrating the crossover (or indifference) point
B. Decide the number of units where either choice has the same cost
Determine the economic order quantity, the reorder point, total annual cost using the EOQ, if cost per tire is $35.00, holding cost is 20% of tire cost per year, demand is 1000 per year ordering cost is $20.00.
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