What is the annual Total Cost at the EOQ

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Reference no: EM13957957

The production rate of final assembly is 2,400 digital video discs (DVDs) per day. After DVDs are assembled, they go directly to finished-goods inventory. Customers demand averages 1,300 DVDs per day, or about 325,000 per year. It costs $700 to set up the assembly line for the DVDs, the cost per DVD is $2.30, and the carrying cost rate is 30 percent of product cost per year.

a. How many DVDs should be in a production batch at final assembly?

b. What is the annual Total Cost at the EOQ?

Reference no: EM13957957

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