A shop that makes candles offe

timer Asked: Nov 5th, 2015

Question description

A shop that makes candles offers a scented candle, which has a monthly demand of 360 boxes. Candles can be produced at a rate of 36 boxes per day. The shop operates 20 days a month. Assume that demand is uniform throughout the month. Setup cost is $60 for a run, and holding cost is $2 per box on a monthly basis. Determine the following: 

What should be the optimum quantity of scented candles to produce?

What is the maximum inventory achieved during a production run?

What is the average inventory of scented candles throughout the year?

What is the cycle time?

 What is the length of a production run in days?

What is the total annual cost of producing and storing the scented candles? 

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