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A shop that makes candles offers a scented candle, which has a monthly demand of 366 boxes. Candles can be produced at a rate of 34 boxes per day. The shop operates 20 days a month. Assume that demand is uniform throughout the month. Setup cost is $52 for a run, and holding cost is $1.96 per box on a monthly basis.
What is the Economic Production (run) Quantity?
A useful note: EPQ formula gives the optimal production quantity during a cycle. Once you have the EPQ, you can use it to calculate Run time, Max inventory, etc..
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