Example: Nahmias 4.3 - Consider a read-only memory producer. Demand is flat at 2,500 units/year....
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Example: Nahmias 4.3 - Consider a read-only memory producer. Demand is flat at 2,500 units/year. Production rate is 10,000 units/year. It costs $50 to initiate a production run. Each unit costs $2 to manufacture. Annual interest rate is 30%. Calculate below a. Optimal size of a production run? b. Length of a production run? c. Average annual cost of holding and setup? d. Maximum level of on-hand inventory? c. maximum dollar investment in inventory
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