Question
In: Statistics and Probability
The company Saydaly manufactures medicines. The annual demand for one of its products is 14600 boxes
The company Saydaly manufactures medicines. The annual demand for one of its products is 14600 boxes. On average, the company produces 100 boxes per day. The average daily demand is 40. The setup cost is estimated to be 200 SAR. The carrying cost is 1 SAR per box per year. How much boxes should the company produce in each batch? (You can round to the nearest integer)
Solutions
Expert Solution
Annual demand = D = 14600 boxes.
Setup cost = S = 200 SAR
Carrying cost = 1 SAR per box per year
Daily demand = d = 40 boxes per day
Production rate = 100 boxes per day
The Optimal Order Quantity (Q) is given by:
=3119.829 boxes per batch
3120 boxes per batch
The company should produce 3120 boxes per batch.
orchestra answered 2 years agoRelated Solutions
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