PINANIA is a famous chocolate factory in Switzerland. Each year, the company must produce as many as 2,200 units (with the same amount of production). Sales are evenly distributed throughout the year. The company wants to determine the number of sizes that can be charged for ordering (setup costs) and holding costs (carrying costs). It can be seen that the production cost for each unit is $50, the carrying cost is 10% of the average inventory and the setup cost is $20 (per production). Question : By using the Differentiation Method (1st and 2nd Derivative Test), Determine the economic lot size for the company and provide an explanation of the calculation results.
PINANIA is a famous chocolate factory in Switzerland. Each year, the company must produce as many as 2,200 units (with the same amount of production). Sales are evenly distributed throughout the year. The company wants to determine the number of sizes that can be charged for ordering (setup costs) and holding costs (carrying costs). It can be seen that the production cost for each unit is $50, the carrying cost is 10% of the average inventory and the setup cost is $20 (per production). Question : By using the Differentiation Method (1st and 2nd Derivative Test), Determine the economic lot size for the company and provide an explanation of the calculation results.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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PINANIA is a famous chocolate factory in Switzerland. Each
year, the company must produce as many as 2,200 units
(with the same amount of production). Sales are evenly
distributed throughout the year. The company wants to
determine the number of sizes that can be charged for
ordering (setup costs) and holding costs (carrying costs). It
can be seen that the production cost for each unit is $50,
the carrying cost is 10% of the average inventory and the
setup cost is $20 (per production).
Question : By using the Differentiation Method (1st and
2nd Derivative Test),
Determine the economic lot size for the company and
provide an explanation of the calculation results.
ASUS
ト
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