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A company that makes kitchen faucets has found that demand for its model faucet is fairly constant at the rate of 100,000 units per year. Each model of faucet is made using the same equipment, and it costs $100 in lost production and scrap every time a change is made from producing one model of faucet to another. The cost of materials and labor in each faucet is $40, and the inventory holding cost is 25 percent of this per unit per year. If faucets are produced at the rate of 1,000 per day.
a. How many should be produced in each production run based on 250 working days per year?
b. What is the maximum inventory level?
c. How many days does it take to produce in a round?
Does incorporation have any impact on business?
K Ltd a multi product company, furnishes you the following data relating to the year 2000. First half sales Second half sales Sales Rs.45000 Rs.50000 Total cost Rs.40000 Rs.43000
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