Calculate the economic production quantity

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Reference no: EM131859910

Question: Couch Potato Products manufactures steel springs for use in lazy master Deluxe couches. The annual demand for these steel springs is 50,000 units. Couch Potato Products can produce 300 steel springs per hour and the company works an 10 hour day for 200 days each year. The cost to set up for production of the steel springs is $220. Each steel spring costs $2.98. The company uses a rate of 20% of the item cost to determine the annual holding cost. Calculate the economic production quantity.

Reference no: EM131859910

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