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Montegut Manufacturing produces a product for which the annual demand is 10,000 units. Production averages 100 units per day, while demand is 40 units per day. Holding costs are $2.00 per unit per year, and setup cost is $200.00.
(a) What is the Economic Production Quantity (EPQ)?
(b) What is the maximum inventory level?
(c) How many order cycles ( = production runs) are there per year?
(d) What are the total annual holding and setup costs (=ordering costs)?
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