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)
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 = 40249.22 ≈ 40250 units.
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