Discuss the below:
Q: Montegut Manufacturing produces a product for which the annual demand is 10,000 units. Production averages 100 units per day, while demand is 40 units per day. Holding costs are $2.00 per unit per year, and setup cost is $200.00.
What is the Economic Production Quantity (EPQ)?
What is the maximum inventory level?
How many order cycles (= production runs) are there per year?
What are the total annual holding and setup costs (=ordering costs)?