Auria will produce a vehicle component and knows that each start generates a cost of 5,000 pesos. Its production capacity is 150,000 units and the cost per unit is $ 200, the annual demand is 100,000 units, and the inventory rate is 15% per month. Consider that the product allows shortages and the cost of goodwill loss is $ 0.3 for each unit of said items, while the penalty cost if they do not deliver is S 30/unit/year. a) Calculate the total annual cost and the quantity Q required.

Auria will produce a vehicle component and knows that each start generates a cost of 5,000 pesos. Its production capacity is 150,000 units and the cost per unit is $ 200, the annual demand is 100,000 units, and the inventory rate is 15% per month. Consider that the product allows shortages and the cost of goodwill loss is $ 0.3 for each unit of said items, while the penalty cost if they do not deliver is S 30/unit/year. a) Calculate the total annual cost and the quantity Q required.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Auria will produce a venicle component and knows that each start generates a cost of 5,000 pesos. Its
production capacity is 150,000 units and the cost per unit is $ 200, tne annual demand is 100,000
units, and the inventory rate is 15% per month.
Consider that the product allows shortages and the cost of goodwill loss is $ 0.3 for each unit of said
items, while the penalty cost if they do not deliver is S 30 / unit / year.
a) Calculate the total annual cost and the quantity Q required.

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