A manufacturer is contemplating a switch from buying to producing a certain item. Setup cost would be the same as ordering cost. The production rate would be about double the usage rate. (Can you please show me how you did it)
1) Compared to the EOQ, the economic run size would be
A) the same
B) approx 20% larger
C) approx 40% larger
D) 20% smaller
E) approx 40% smaller
2. Compared to the EOQ, the miximum inventory would be
A) approx 70% higher
B) approx 30% higher
C) the same
D) approx 30% lower
E) approx 70% lower