Determine the production order quantity

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Reference no: EM131919413

Question: Charles Cycles produces bicycles and tricycles. The setup cost when switching production from one to the other is $1,000. On average, retail customers order 150 tricycles per day (consider a 250-day year). The daily production rate for tricycles is 600 units. Unit cost of a tricycle is $60 and the company has determined inventory carrying cost to be 15 percent. What should the production order quantity be?

Reference no: EM131919413

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