Profitable to increase the daily production amount

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Reference no: EM131124469

A manufacturer currently making decisions under the EPQ model wants to see if it would be profitable to increase the daily production from 300 to 400 units. Currently they are experiencing a daily demand of 200 units and their optimal production quantity Q* is 3000 units. The analyst states, unless the new production amount is more than 1500 units, it is not profitable to increase the daily production amount. Should they increase the daily production?

Reference no: EM131124469

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