Economic production quantity problem

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Economic Production Quantity Problem

Plastique Company produces plastic cases for electronic manufacturers through its proprietary injection modeling process. Annual demand for their plastic cases is 48,000 units for its most popular case. The factory is capable of a rate of production of 800 cases per day. The factory manager has indicated that set-up costs are $45 and the inventory holding cost per case is $1.00. Plastique’s factory operates 240 days per year. Plastique Company’s management has indicated it wants to optimize costs using an EPQ inventory model.

Determine the optimal production quantity using the basic EPQ model?

What is the maximum inventory that can be achieved in a production run?

How many runs are needed to meet annual demand?

What is the length of a production run?

What is cycle time of for the optimum run?

What is Plastique Company’s total annual producing and storing costs of their plastic cases using the basic EPQ model?

Reference no: EM132236042

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