Question

12.18 race one motors is an indonesian car manufacturer. at its largest manufacturing facility, in jakarta, the company produces subcomponents at a rate of 300 per day, and it uses these subcomponents at a rate of 12,500 per year (of 250 working days). holding costs are $2 per item per year, and ordering (setup) costs are $30 per order. a) what is the economic production quantity?

Answer 1

If  race one motors is an indonesian car manufacturer. the economic production quantity is: 671.

How to find the economic production quantity?

Using this formula to find the economic production quantity

Economic production quantity= √2×D×S ÷ H( 1- d/p)

Let plug in the formula

Economic production quantity= √2 × 12,500 × 30 ÷ 2 (1 - 50/300)

Economic production quantity= √ 750,000 ÷ 2 (1 -0.166666)

Economic production quantity= 671

Therefore the Economic production quantity is 671.

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