Inventory Control You are the production manager of GVT Manufacturing, a company that manufactures a wide range...

80.2K

Verified Solution

Question

General Management

Inventory Control
You are the production manager of GVT Manufacturing, a companythat manufactures a wide range of products, including fireextinguishers. Data shows that GVT is projected to manufacture30,000 of these fire extinguishers next year. A production-year forGVT covers 300 days. Information on the product also reveals thateach extinguisher requires one handle. Additional informationgleaned from the production records shows the following: annualcarrying cost per handle is US$1.50; production setup cost isUS$150 and daily production rate is 300 handles. Required a)Calculate and state the optimal production order quantity that willminimise inventory costs. b) Calculate and state the correspondinginventory costs from the quantity calculated in (a).

Answer & Explanation Solved by verified expert

4.1 Ratings (606 Votes)

Answer a Though the annual production capacity of handles is 90000 units but since the demand of fire extinguisher is only 30000 units and each fire extinguisher requires 1 See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member