Question: BCD Co. manufactures bicycles. Demand for this year’s model is expected to occur at a constant annual rate of 8000 items. One bicycle costs $165. The holding cost is based on a 8% annual rate, and production setup costs are $480. The manufacturing plant has an annual production capacity of 16000 units. Acme has 280 working days per year, and the lead time for a production run is 4 days. Use the production lot size model to compute the following values:

1. Minimum cost production lot size
2. Number of production runs per year
3. Cycle time
4. Length of a production run
5. Maximum inventory
6. Total annual cost
7. Reorder point

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Solution: The downloadable solution consists of 3 pages
Deliverable: Word Document