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 7,000 copies. The cost of one copy of the book is $13. The holding cost is based on an 16% annual rate, and production setup costs are $135 per setup. The equipment on which the book is produced has an annual production volume of 25,000 copies. Wilson has 250 working days per year, and the lead time for a production run is 17 days. Use the production lot size model to compute the following values:

Minimum cost production lot size. Round your answer to the nearest whole number. Do not round intermediate values. Q* =

Number of production runs per year. Round your answer to two decimal places. Do not round intermediate values.

Number of production runs per year =

Cycle time. Round your answer to two decimal places. Do not round intermediate values.

T = days

Length of a production run. Round your answer to two decimal places. Do not round intermediate values.

Production run length = days

Maximum inventory. Round your answer to the nearest whole number. Do not round intermediate values.

Maximum inventory =

Total annual cost. Round your answer to the nearest dollar. Do not round intermediate values.

Total annual cost = $

Reorder point. Round your answer to the nearest whole number. Do not round intermediate values.

r =

Answer 1