EPQ for Brown Manufacturing Produces mini refrigerators (has 167 business days per year) D = 10,000 units annually d = 1000 / 167 = ~60 units per day p = 80 units per day (when producing) Ch = $0.50 per unit per year Cs = $100 per setup P = $5 to produce each unit
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It's a variation of the Economic Order Quantity (EOQ) model that is applicable when production happens over time rather than in a single batch. Show more…
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