Montegut manufacturing produces a product for which the annual demand is 12,500 units. production averages 80 units per day, while demand is 50 units per day. holding costs are $5.00 per unit per year, and setup cost is $150.00. (a) if the firm wishes to produce this product in economic batches, what size batch should be used? (b) what is the maximum inventory level? (c) how many order cycles are there per year? (d) what are the total annual holding and setup costs?

(a.) Economic batch size = 1,414 units

(b.) Maximum inventory level = 530 units

(c.) Number of order cycles = 8.84 cycles per year

(d.) Total annual holding and setup costs = $2,651

Explanation:

Given:

Annual demand (D) = 12,500 units

Setup cost (S) = $150

Holding cost (H) = $5 per unit per year

Daily production (p) = 80 units per day

Daily Demand (d) = 50 units per day

(a) Economic batch size (Q):

Q =

Q =

Q = 1,414.21 1,414

Economic batch size = 1,414 units

(b) Maximum inventory level ():

= Q × (1 - )

= 1,414 × (1 - )

= 530.25 530

Maximum inventory level = 530 units

(c) Number of order cycles:

Number of order cycles =

Number of order cycles =

Number of order cycles = 8.84 cycles per year

(d) Total annual holding and setup costs:

Total costs = Annual holding + Annual setup costs

Total costs = [( ÷ 2) × H] + [Number of order cycles × S]

Total costs = [(530 / 2) × $5] + [8.84 × $150]

Total costs = $1,325 + $1,326

Total costs = $2,651

c

explanation:

c because the item on a bank statement is also referred to as an account statement. in addition, it provides the beginning balance, ending balance, statement date, transaction date for each transaction, payee, customer name and address, statement period, the account holder's account number, and the bank's customer service number