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A firm making snowblowers produces the augers for each snowblower in batches. Annual demand is for 3,000 snowblowers, which means 3,000 augers need to be produced each year. On a given workday, 10 augers are needed for snowblower production. Annual holding costs are $3 per auger. Before the augers are produced, a setup cost of $100 is incurred to setup the equipment to produce a batch of augers. The firm can produce 50 augers per day. Given this information, find the economic production quantity for the auger units. Note: When doing interim calculations, round value to 2 decimal points.

A firm making snowblowers produces the augers for each snowblower in batches. Annual demand is for 3,000 snowblowers, which means 3,000 augers need to be produced each year. On a given workday, 10 augers are needed for snowblower production. Annual holding costs are $3 per auger. Before the augers are produced, a setup cost of $100 is incurred to setup the equipment to produce a batch of augers. The firm can produce 50 augers per day. Given this information, find the economic production quantity for the auger units. Note: When doing interim calculations, round value to 2 decimal points.

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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A firm making snowblowers produces the augers for each snowblower in batches. Annual demand is for 3,000 snowblowers, which means 3,000 augers need to be produced each year. On a given workday, 10 augers are needed for snowblower production. Annual holding costs are $3 per auger. Before the augers are produced, a setup cost of $100 is incurred to setup the equipment to produce a batch of augers. The firm can produce 50 augers per day. Given this information, find the economic production quantity for the auger units.

Note: When doing interim calculations, round value to 2 decimal points. 

 

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