The optimal size of the production run. Introduction: Economic production quantity (EPQ): The economic production quantity is used to determine the amount a company or a retail outlet should purchase at every order so as to minimize the associated total inventory costs. It is done by balancing the holding cost and the ordering cost.

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Answer 1

Question

Chapter 12, Problem 19P

a)

Summary Introduction

To calculate: The optimal size of the production run.

Introduction:

Economic production quantity (EPQ):

The economic production quantity is used to determine the amount a company or a retail outlet should purchase at every order so as to minimize the associated total inventory costs. It is done by balancing the holding cost and the ordering cost.

b)

Summary Introduction

To calculate: The average holding cost per year.

Introduction:

Average holding cost:

The average holding cost is the cost associated with storing the inventory of unsold items. It will also consider the cost of loss of goods, labor and other associated costs.

c)

Summary Introduction

To calculate: The average setup cost per year.

Introduction:

Average setup cost:

The average setup cost is the expense involved in setting up a business which includes the machinery, labor, infrastructure and the cost of other associated requirements.

d)

Summary Introduction

To calculate: The total cost including the cost of lights per year.

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Radovilsky Manufacturing Company, in Hayward, California, makes flashing lights for toys. The company operates its production facility 300 days per year. It has orders for about 12,300 flashing lights per year and has the capability of producing 100 per day. Setting up the light production costs $48. The cost of each light is $1.05. The holding cost is $0.15 per light per year. a) What is the optimal size of the production run? units (round your response to the nearest whole number).

Radovilsky Manufacturing Company, in Hayward, California, makes flashing lights for toys. The company operates its production facility 300 days per year. It has orders for about 11,900 flashing lights per year and has the capability of producing 95 per day. Setting up the light production costs $48. The cost of each light is $0.95. The holding cost is $0.15 per light per year. a) What is the optimal size of the production run? number). b) What is the average holding cost per year? $ (round your response to two decimal places). c) What is the average setup cost per year? $ (round your response to two decimal places). d) What is the total cost per year, including the cost of the lights? $ (round your response to two decimal places). units (round your response to the nearest whole

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Answer 2

Question

Chapter 12, Problem 19P

a)

Summary Introduction

To calculate: The optimal size of the production run.

Introduction:

Economic production quantity (EPQ):

The economic production quantity is used to determine the amount a company or a retail outlet should purchase at every order so as to minimize the associated total inventory costs. It is done by balancing the holding cost and the ordering cost.

b)

Summary Introduction

To calculate: The average holding cost per year.

Introduction:

Average holding cost:

The average holding cost is the cost associated with storing the inventory of unsold items. It will also consider the cost of loss of goods, labor and other associated costs.

c)

Summary Introduction

To calculate: The average setup cost per year.

Introduction:

Average setup cost:

The average setup cost is the expense involved in setting up a business which includes the machinery, labor, infrastructure and the cost of other associated requirements.

d)

Summary Introduction

To calculate: The total cost including the cost of lights per year.

Expert Solution & Answer

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Answer 3

Question

Chapter 12, Problem 19P

a)

Summary Introduction

To calculate: The optimal size of the production run.

Introduction:

Economic production quantity (EPQ):

The economic production quantity is used to determine the amount a company or a retail outlet should purchase at every order so as to minimize the associated total inventory costs. It is done by balancing the holding cost and the ordering cost.

b)

Summary Introduction

To calculate: The average holding cost per year.

Introduction:

Average holding cost:

The average holding cost is the cost associated with storing the inventory of unsold items. It will also consider the cost of loss of goods, labor and other associated costs.

c)

Summary Introduction

To calculate: The average setup cost per year.

Introduction:

Average setup cost:

The average setup cost is the expense involved in setting up a business which includes the machinery, labor, infrastructure and the cost of other associated requirements.

d)

Summary Introduction

To calculate: The total cost including the cost of lights per year.

Expert Solution & Answer

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Answer 4

Question

Chapter 12, Problem 19P

a)

Summary Introduction

To calculate: The optimal size of the production run.

Introduction:

Economic production quantity (EPQ):

The economic production quantity is used to determine the amount a company or a retail outlet should purchase at every order so as to minimize the associated total inventory costs. It is done by balancing the holding cost and the ordering cost.

b)

Summary Introduction

To calculate: The average holding cost per year.

Introduction:

Average holding cost:

The average holding cost is the cost associated with storing the inventory of unsold items. It will also consider the cost of loss of goods, labor and other associated costs.

c)

Summary Introduction

To calculate: The average setup cost per year.

Introduction:

Average setup cost:

The average setup cost is the expense involved in setting up a business which includes the machinery, labor, infrastructure and the cost of other associated requirements.

d)

Summary Introduction

To calculate: The total cost including the cost of lights per year.

Expert Solution & Answer

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Answer 5

Chapter 12, Problem 19P

a)

Summary Introduction

To calculate: The optimal size of the production run.

Introduction:

Economic production quantity (EPQ):

The economic production quantity is used to determine the amount a company or a retail outlet should purchase at every order so as to minimize the associated total inventory costs. It is done by balancing the holding cost and the ordering cost.

b)

Summary Introduction

To calculate: The average holding cost per year.

Introduction:

Average holding cost:

The average holding cost is the cost associated with storing the inventory of unsold items. It will also consider the cost of loss of goods, labor and other associated costs.

c)

Summary Introduction

To calculate: The average setup cost per year.

Introduction:

Average setup cost:

The average setup cost is the expense involved in setting up a business which includes the machinery, labor, infrastructure and the cost of other associated requirements.

d)

Summary Introduction

To calculate: The total cost including the cost of lights per year.

Answer 6

Chapter 12, Problem 19P

a)

Summary Introduction

To calculate: The optimal size of the production run.

Introduction:

Economic production quantity (EPQ):

The economic production quantity is used to determine the amount a company or a retail outlet should purchase at every order so as to minimize the associated total inventory costs. It is done by balancing the holding cost and the ordering cost.

Answer 7

Chapter 12, Problem 19P

a)

Summary Introduction

To calculate: The optimal size of the production run.

Introduction:

Economic production quantity (EPQ):

The economic production quantity is used to determine the amount a company or a retail outlet should purchase at every order so as to minimize the associated total inventory costs. It is done by balancing the holding cost and the ordering cost.

Answer 8

b)

Summary Introduction

To calculate: The average holding cost per year.

Introduction:

Average holding cost:

The average holding cost is the cost associated with storing the inventory of unsold items. It will also consider the cost of loss of goods, labor and other associated costs.

Answer 9

b)

Summary Introduction

To calculate: The average holding cost per year.

Introduction:

Average holding cost:

The average holding cost is the cost associated with storing the inventory of unsold items. It will also consider the cost of loss of goods, labor and other associated costs.

Answer 10

c)

Summary Introduction

To calculate: The average setup cost per year.

Introduction:

Average setup cost:

The average setup cost is the expense involved in setting up a business which includes the machinery, labor, infrastructure and the cost of other associated requirements.

Answer 11

c)

Summary Introduction

To calculate: The average setup cost per year.

Introduction:

Average setup cost:

The average setup cost is the expense involved in setting up a business which includes the machinery, labor, infrastructure and the cost of other associated requirements.

Answer 12

d)

Summary Introduction

To calculate: The total cost including the cost of lights per year.

Answer 13

d)

Summary Introduction

To calculate: The total cost including the cost of lights per year.

Answer 14

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Answer 15

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Answer 16

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Answer 17

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Solution Summary: The author calculates the optimal size of the production run by balancing the holding cost and the ordering cost.

Concept explainers

Videos

To calculate: The average holding cost per year.

Introduction:

Average holding cost:

The average holding cost is the cost associated with storing the inventory of unsold items. It will also consider the cost of loss of goods, labor and other associated costs.

To calculate: The average setup cost per year.

Introduction:

Average setup cost:

The average setup cost is the expense involved in setting up a business which includes the machinery, labor, infrastructure and the cost of other associated requirements.

To calculate: The total cost including the cost of lights per year.

Want to see the full answer?

Chapter 12 Solutions

Solution Summary: The author calculates the optimal size of the production run by balancing the holding cost and the ordering cost.

Concept explainers

Videos

To calculate: The average holding cost per year. Introduction: Average holding cost: The average holding cost is the cost associated with storing the inventory of unsold items. It will also consider the cost of loss of goods, labor and other associated costs.

To calculate: The average setup cost per year. Introduction: Average setup cost: The average setup cost is the expense involved in setting up a business which includes the machinery, labor, infrastructure and the cost of other associated requirements.

To calculate: The total cost including the cost of lights per year.

Want to see the full answer?

Chapter 12 Solutions

To calculate: The average holding cost per year.

Introduction:

Average holding cost:

The average holding cost is the cost associated with storing the inventory of unsold items. It will also consider the cost of loss of goods, labor and other associated costs.

To calculate: The average setup cost per year.

Introduction:

Average setup cost:

The average setup cost is the expense involved in setting up a business which includes the machinery, labor, infrastructure and the cost of other associated requirements.