Question

Daily production capacity of a bearing manufacturing company is 30000 bearings. The daily demand of the bearing is 15000. The holding cost per year of keeping a bearing in the inventory is ₹ 20. The setup cost for the production of a batch is ₹ 1800. Assuming 300 working days in a year, the economic batch quantity in number of bearings is ______________ (in integer)

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Answer :

Correct answer is : 40250

p = 30000 unit/day, d = 15000 unit/day, CH = 20 Rs/unit/yr, Co = 1800 Rs/setup.

Number of working days in a year = 300

∴ D = d × (Number of working days in a year) = 300 × 15000 units/yr

P = p × (Number of working days in a year) = 300 × 30000 units/yr

So, Economic batch quantity,

Q = 2 D C o C H ( P P D )

Q = 2 × 15000 × 300 × 1800 20 × ( 30000 × 300 ( 30000 × 300 ) ( 15000 × 300 ) )

Q = 40249.22 ≈ 40250 units.

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