For what changeover costs would this batch size be optimal

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Reference no: EM131718648

A steel rolling mill can produce I-beams at the rate of 20 tons per week. Customer demand for the beams is 5 tons per week. I-beams cost the mill $2,000 per ton and the mill has a holding cost of 25 percent. To produce I-beams, the mill must go through a setup that requires changing to the appropriate rolling patterns. The mill would like to produce I-beams in batches of 40 tons (resulting in a production batch every eight weeks). For what changeover costs would this batch size be optimal? (Show in excel if you can?)

Reference no: EM131718648

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