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Montegut Manufacturing produces a product for which the annual demand is 10,000 units (D). Production averages 100

per day (p), while demand is 40 per day (d). Holding costs are $1.00 per unit per year (H); set-up costs $200.00 per run (S). If they wish to produce this product in economic batches, what is the economic production quantity?


Using the Montegut Manufacturing question, what is the maximum inventory level?

a.775 units

b.1,550 units

c.3,000 units

d.2,582 unit

e.None of the above

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