Auria will produce a vehicle component and knows that each start generates a cost of...
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Accounting
Auria will produce a vehicle component and knows that each start generates a cost of 5,000 USD. Its production capacity is 150,000 units and the cost per unit is $ 200, the annual demand is 100,000 units, and the inventory rate is 15% per month. Consider that the product allows shortages and the cost of goodwill loss is $ 0.3 for each unit of said items, while the penalty cost if they do not deliver is $ 30 / unit / year. a) Calculate the total annual cost and the quantity Q required.
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