If the annual demand is reduced to 8,000 units, the set-up costs increased to $120, inventory carrying cost increased to $0.60 per unit per year and the demand during the production period is maintained at 60 units per day and 80 units can be manufactured daily, calculate a. The optimum production quantity (Q*) per production run (or per production lot). b. The length of each production run.

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**Problem Statement: Production Run Calculations**

If the annual demand is reduced to 8,000 units, the set-up costs increased to $120, the inventory carrying cost increased to $0.60 per unit per year, and the demand during the production period is maintained at 60 units per day with 80 units that can be manufactured daily, calculate the following:

a. The optimum production quantity (Q*) per production run (or per production lot).

b. The length of each production run.

c. The number of production runs per year.
Transcribed Image Text:**Problem Statement: Production Run Calculations** If the annual demand is reduced to 8,000 units, the set-up costs increased to $120, the inventory carrying cost increased to $0.60 per unit per year, and the demand during the production period is maintained at 60 units per day with 80 units that can be manufactured daily, calculate the following: a. The optimum production quantity (Q*) per production run (or per production lot). b. The length of each production run. c. The number of production runs per year.
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