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pls help me show the workings to the below illustration
A firm decided to manufacture its own item of stock at the Rate of 16,000 items per month Demand for the item is at the rate of 8000 in one month each production run cost 40 and holding cost per item is 0.80 per month
1. Determine the economic production run
2.The length of inventory cycle
3.number of production run per month
4.total cost of production per monthYou need to use the formula on the formula sheet to calculate the economic batch quantity.
Although you can use the month figures in the formula, it is better to get into the habit of using the yearly figures.
So:
D = 12 x 8,000 = 96,000
Co = 40
Ch = 12 x 0.8 = 9.60
R = 12 x 16,000 = 192,000Once you have the EBQ, the rest of the answers should be easy enough (if not then do watch the free lecture on inventory control using the free lecture notes that go with them)
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