Business Finance
fiber production company

Question Description

I need help with a Business question. All explanations and answers will be used to help me learn.

a fiber production company produces fibers at the rate of 5000 meter per hour.the consumption is at the rate of 20000 m/day(8hrs/day).the cost of fiber is rs.5/m.the inventory carrying cost is 25 percent and the setup costs are rs.4050/setup.compute the optimal number of cycles required in a year for this fiber.

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Final Answer

As per your question the fiber consumption for 1 year is 20000(consumption for 1day) x 365 =7300000

 So If the word cycle in your question  means 1 hr of production the answer would be 1460 cycles(7300000/5000) 

and if the word cycle in  your question means a day of production it would take 182.5 days(1460/8 as in a day we work 8hrs per day) to produce fiber required for 1 year.

Please feel free to contact if you want the cost calculation for the fiber production for 1 year.

Smartbrains (326)
Boston College

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