Determine the annual holding cost

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Reference no: EM132290491

Capital Spring manufactures tapered stainless steel springs for use in whirlpool bath jets. The annual demand for these tapered stainless steel springs is 340,000 units. Capital Spring can produce 5,000 tapered stainless steel springs per hour and the company works an 8 hour day for 240 days each year.

The cost to set up for production of the tapered stainless steel springs is $55. Each tapered stainless steel spring costs $1.56. The company uses a rate of 17% of the item cost to determine the annual holding cost. Calculate the economic production quantity.

Reference no: EM132290491

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