What would be the additional cost per unit

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A company requires a component at the rate of 750 components per week for its assembly operations. The component can be manufactured in the company's workshop at a rate of 3000 units per week. The component needs to be heat treated in a special oven which takes two weeks and then tested which can be assumed to take no time, before it can be released to the assembly line. The cost of the part is £20 and the interest rate used by the company is 15% per year. The set up cost of the machine on which the component will be produced is £2000. Determine the Economic Batch Quantity (EBQ) and the associated cost per unit. If the batch quantity has to be a multiple of 3000 units, what would be the additional cost per unit?

Reference no: EM13227547

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