32.This is Cost Accounting. Explain briefly and answer. The following information pertains to Lannister Manufacturing Corporation’s Product Y: Annual Demand 33,750 units Annual cost to hold one unit of inventory P15 Setup cost (or the cost to initiate a production run) P500 Beginning Inventory of Product Y - 0 - At present, the company produces 2,250 units of Product X per production run, for a total of 15 production runs per year. The company is considering to use the EOQ model to determine the economic lot size and the number of production runs that will minimize the total inventory carrying cost and setup cost for Product Y If the EOQ model is used, what should be the number of production runs? (round to whole number)
32.This is Cost Accounting. Explain briefly and answer.
The following information pertains to Lannister Manufacturing Corporation’s Product Y:
|
Annual Demand |
33,750 units |
|
Annual cost to hold one unit of inventory |
P15 |
|
Setup cost (or the cost to initiate a production run) |
P500 |
|
Beginning Inventory of Product Y |
- 0 - |
At present, the company produces 2,250 units of Product X per production run, for a total of 15 production runs per year. The company is considering to use the EOQ model to determine the economic lot size and the number of production runs that will minimize the total inventory carrying cost and setup cost for Product Y
If the EOQ model is used, what should be the number of production runs? (round to whole number)
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