Consider a Product with a Daily Demand of 400 Units,a

question 60

Essay

Consider a product with a daily demand of 400 units,a setup cost per production run of $100,a monthly holding cost per unit of $2.00,and an annual production rate of 292,000 units.The firm operates and experiences demand 365 days per year.Suppose that management mistakenly used the basic EOQ model to calculate the batch size instead of using the POQ model.How much money per year has that mistake cost the company?

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Definitions:

Daily Values

Recommended nutrient intakes on food labels, based on public health experts' advice, to help consumers make informed food choices.

Daily Caloric Intake

The total number of calories consumed through food and drink over the course of a day, important for maintaining, losing, or gaining weight.

Calories

Units of energy used to measure the energy food provides to the body, as well as the energy the body uses in physical activities.

Whole Grains

Grains that contain all essential parts and naturally-occurring nutrients of the entire grain seed, including the bran, germ, and endosperm.