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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › Accounting for Material.
Hi Mr. Maffot
Can you please explain what to do with the resupply of 10000 units.
ACB Co gradually receives its re-supply of inventory at a rate of 10,000 units a week. Other information is available as follows.
Weekly demand 5,000 units
Set-up costs for each production run $125
Weekly cost of holding one unit $0.0025
What is the economic production run?
You need to use the economic batch quantity formula, as explained in my free lectures on inventory control.