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Compute the estimated total carrying costs

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Question - Gleim Company, which manufactures a line of appliances, has an annual demand for its HD washing machine estimated at 7,500 units. The annual cost of carrying one unit of inventory is P200, and the cost to initiate a production run is P5,000.There are no HD washing machine on hand, and Gleim has scheduled 5 equal production runs of HD washing machines for the coming year. Gleim has 250 business days per year. Assume that sales occur uniformly throughout the year and that production is instantaneous.

If Gleim does not maintain a safety stock, compute the estimated total carrying costs and total set-up costs for the coming year?

Reference no: EM132576639

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