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Develop a level material use schedule. Calculate the setup

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Question 22: A firm wants to develop a level material use schedule based on the following data. What should be the setup cost?

a) $0.45
b) $4.50
c) $45
d) $450
e) $500

The provided data is:

Desired lot size: 60
Annual demand: 40,000
Holding cost: $20 per unit per year
Daily production rate: 320
Work days per year: 250

Please select the right answer and show how you have calculated it.

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Solution Summary

The expert develops a level material used to schedule. The calculations are set up.

Solution Preview

Daily Demand = 40,000 / 250 = 160 Units

EPQ = SQRT [ 2 X Demand ...

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  • BE, Bangalore University, India
  • MS, University of Wisconsin-Madison
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