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)

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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 1 year ago

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