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1. The relationship between unit price and demand for a product per month is D=7,500-50p. The total fixed cost for this product is $42,000 per month and the variable unit cost is $53. From Chapter 2. a) What is the optimal number of units that should be produced and sold per month? b) What is the maximum profit per month?
2. Acme sells part X which has a cost of $60 each and which they sell for $100. Monthly demand is 1,000 items. Acme calculates the cost to place an order for the materials needed to make part X is $40. The inventory carrying cost is 10% / year.
What is the EOQ?
How many times in a year will part X be re-ordered?
What is the average annual inventory level for part X
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