a.
Interpretation: Optimal size of the production run for this particular compound is to be calculated.
Concept Introduction:
Economic order quantity, often called EOQ refers to the order quantity that helps an organization to maintain its inventory level and to minimize holding and order cost for the organization’s business.
b.
Interpretation: Proportion of each production cycle that consist uptime and downtime is to be determined.
Concept Introduction:
Uptime refers to the ration of the total time during which the tools or machinery is operational. On the other hand downtime refers to the ratio of the total time during which the tools or machinery is non-operational.
c.
Interpretation: Average annual cost of holding and setup attributes to the given item along with the annual profit the company is realizing with the given item, if the compound sell become $3.90 is to be determined.
Concept Introduction:
Holding cost is related to the stored inventory which remains unsold. An organization’s holding cost is the cost of damaged or spoiled goods, labor, and space.
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Production and Operations Analysis, Seventh Edition
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