- A Publishing Company Produces Books For The Retail Market Demand For A Current Book Is Expected To Occur At A Constant 1 (186.02 KiB) Viewed 25 times
A publishing Company produces books for the retail market. Demand for a current book is expected to occur at a constant annual rate of 7500 copies. The cost of one copy of the book is $27.50. The holding cost is based on 18% annual rate, and production setup costs are $550.00. The equipment on which the book is produced has an annual production volume of 21,000 copies. The Company uses 250 working days per year and the lead time for a production run is 12 days. Assume the company is willing to tolerate one stock-out per year and that the lead time demand follows a normal distribution with a standard deviation of 75 copies. Using an appropriate Fixed Order Quantity system model compute the following: (a) Minimum cost production lot size (whole number with no commas) - copies (b) Number of production runs per year (two decimal points) - runs (C) Cycle time (two decimal points) - days (d) Length of production run (two decimal points)- days (e) Maximum inventory (use the closest Z value, answer whole number) - copies (1) The reorder point (whole number) - copies (g) Total annual stocking cost (two decimal points with no commas) - $