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).
