Nestle Ltd. produces its premium plant food in 50 Kg bags. Demand is 100,000 Kgs. per week and the plant operates 52 weeks each year. Nestle can produce 250,000 Kgs. per week. The setup cost is OMR 200 and the annual holding cost rate is OMR 0.3 per bag. What will the optimal maximum inventory level on-hand end of each production run? Round-up to the nearest integer a. 9122 O b. 6737 O c. None is correct d. 6606 e. 7532
Nestle Ltd. produces its premium plant food in 50 Kg bags. Demand is 100,000 Kgs. per week and the plant operates 52 weeks each year. Nestle can produce 250,000 Kgs. per week. The setup cost is OMR 200 and the annual holding cost rate is OMR 0.3 per bag. What will the optimal maximum inventory level on-hand end of each production run? Round-up to the nearest integer a. 9122 O b. 6737 O c. None is correct d. 6606 e. 7532
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Nestle Ltd. produces its premium plant food in 50 Kg bags. Demand is 100,000 Kgs. per week and the plant
operates 52 weeks each year. Nestle can produce 250,000 Kgs. per week. The setup cost is OMR 200 and
the annual holding cost rate is OMR 0.3 per bag. What will the optimal maximum inventory level on-hand
end of each production run? Round-up to the nearest integer
a.
9122
O b. 6737
C.
None is correct
O d. 6606
O e. 7532](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fca81806b-00ac-4e70-8257-76a0e5149575%2F3ea7838e-111e-4f71-987d-e3e2b659e1a1%2Fp3kypmi_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Nestle Ltd. produces its premium plant food in 50 Kg bags. Demand is 100,000 Kgs. per week and the plant
operates 52 weeks each year. Nestle can produce 250,000 Kgs. per week. The setup cost is OMR 200 and
the annual holding cost rate is OMR 0.3 per bag. What will the optimal maximum inventory level on-hand
end of each production run? Round-up to the nearest integer
a.
9122
O b. 6737
C.
None is correct
O d. 6606
O e. 7532
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