Solution-Compute the number of small casings

Compute the number of small casings

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Reference no: EM132804819

Morrison Manufacturing produces casings for sewing machines: large and small. To produce the different casings, equipment must be set up. The setup cost per production run is $18,000 for either casing. The cost of carrying small casings in inventory is $6 per casing per year; the cost of large casings is $18 per unit per year. To satisfy demand, the company produces 2,400,000 small casings and 800,000 large casings.

Required:

Problem 1: Compute the number of small casings that should be produced per setup to minimize total setup and carrying costs.

Problem 2: Compute the setup, carrying, and total costs associated with the economic order quantity for the small casings.

Reference no: EM132804819

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Compute the number of small casings

Reference no: EM132804819

Reference no: EM132804819

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