Question

Race One Motors is an Indonesian car manufacturer. At its largest manufacturing​ facility, in​ Jakarta, the company produces subcomponents at a rate of 305 per​ day, and it uses these subcomponents at a rate of 12 comma 400 per year​ (of 250 working​ days). Holding costs are ​$3 per item per​ year, and ordering costs are ​$29 per order. ​

a) What is the economic production quantity?
b) How many production runs per year will be made?
c) What will be the maximum inventory level?
d) What percentage of time will the facility be producing components?
e) What is the annual cost of ordering and holding inventory?

Answer 1

a. 534.23

b. 23.21

c. $448.75

d. 16.26%

e. $1,346.22

Step-by-step explanation:

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