Lenovo uses 450,000 hard disks per year to mount in their laptops. The manufacturer receives the hard disks from a supplier at a rate of 1800 per day. Carrying cost per hard disk is $2/year and setup cost for a production run is $450. The plant operates 250 days per year.
1- Compute the economics production quantity. Equation is EPQ= SQUT((2*D*S)/H(1-d/p))
2- Compute the maximum inventory. Equation is Imax= Q*(1-d/p).