Question

A furniture store produces tables and doors and sells them through its outlets across the country. The wood working machines are first set for producing tables, and the produced tables are stocked for meeting the customers' demand. Once enough tables are made, the machines are reset to produce doors. The machines have the capacity to produce 300 tables per day. The annual demand for tables is 15,000 units. The store is open for 300 days in a year. The setup cost to arrange the machines to produce tables per production cycle is RM5,000. The average carrying cost per table per annum is RM50. Determine: a) The optimal production quantity for each batch b) Maximum inventory level c) Total inventory cost

          A furniture store produces tables and doors and sells them through its outlets across the country. The wood working machines are first set for producing tables, and the produced tables are stocked for meeting the customers' demand. Once enough tables are made, the machines are reset to produce doors. The machines have the capacity to produce 300 tables per day. The annual demand for tables is 15,000 units. The store is open for 300 days in a year. The setup cost to arrange the machines to produce tables per production cycle is RM5,000. The average carrying cost per table per annum is RM50. Determine:

a) The optimal production quantity for each batch
b) Maximum inventory level
c) Total inventory cost

A furniture store produces tables and doors and sells them through its outlets across the country. The wood working machines are first set for producing tables, and the produced tables are stocked for meeting the customers' demand. Once enough tables are made, the machines are reset to produce doors. The machines have the capacity to produce 300 tables per day. The annual demand for tables is 15,000 units. The store is open for 300 days in a year. The setup cost to arrange the machines to produce tables per production cycle is RM5,000. The average carrying cost per table per annum is RM50. Determine:

a) The optimal production quantity for each batch
b) Maximum inventory level
c) Total inventory cost

Added by Chelsea R.

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