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Unformatted text preview: b) Calculate Total Cost c) Describe inventory policy 3. Good Garden Company (GGC) produces a high-quality organic lawn food and weed eliminator called Super Green (SG). Super Green is sold in a 50-pound bag. Monthly demand for Super Green is 75,000 pounds. GGC has a capacity to produce 24,000 50-pound bags per year. The setup cost to produce Super Green is $300. Annual holding cost is estimated to be $3 per 50-pound bag. Currently, SG is producing in batches of 2,500 bags. a) Calculate the total annual costs of the current operating policy at GGC (hint: current Q=2,500 bags) b) Calculate the EPQ, total costs of the EPQ policy, describe the policy c) Calculate the penalty cost incurred with the present policy...
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- Spring '08