What is the average inventory level

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Reference no: EM133642793

Question

LEE is considering manufacturing many of the components. The cost to set up for producing a standard component is approximately $200 (considering labor, testing facilities, etc.). Once set up they can produce at a rate of approximately 20 units /day (4,000 units per year) at a cost of $100 each. Daily demand is forecast at 15 units. If the firm uses a 30% annual rate of inventory value for holding inventory: [Note: It is Production Run Length or Production Run Size model (ERL) related problem] What is the average inventory level (i.e., average inventory level of production run size)? (find the nearest value).

Reference no: EM133642793

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