Question

Wilson Publishing Company produces books for the retail market. Demand for a current book is expected to occur at a constant annual rate of 7200 copies. The cost of one copy of the book is $13.5. The holding cost is based on an 21% annual rate, and production setup costs are $170 per setup. The equipment on which the book is produced has an annual production volume of 25000 copies. Wilson has 250 working days per year, and the lead time for a production run is 12 days. Use the production lot size model to compute the following values:

Minimum cost production lot size. Do not round intermediate values and round your final answer to two decimal places.

Q* = Number of production runs per year. Do not round intermediate values and round your final answer to two decimal places.

Number of production runs per year = Cycle time. Do not round intermediate values and round your final answer to two decimal places.

T = days Length of a production run. Do not round intermediate values and round your final answer to two decimal places.

Production run length = days Maximum inventory. Do not round intermediate values and round your final answer to two decimal places.

Maximum inventory = Total annual cost. Do not round intermediate values and round your final answer to two decimal places. Total cost = $

Reorder point. Do not round intermediate values and round your final answer to two decimal places. r =

Answer 1