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# Managing a Business/production and material management

Question
Sir, I need solutions of this problem
pl help me sir.

Q.No.1. Compute the EBQ for manufacture given the following data:

monthly demand          -1000 units
daily production rate  -  50 units
days in a month        -  25 days
cost of set up          -  Rs.2000/-
cost of holding inventory  -  Rs.20 per unit per year

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Q.No.2. The annual demand of product is 4800 units. The ordering cost per order is Rs.400 and the carrying cost is Rs.5 per unit per year:

(a) Economic Order Quantity
(b) Number of order per year
(c) Time between consecutive order

thank u sir

Q.No.1. Compute the EBQ for manufacture given the following data:

monthly demand          -1000 units
daily production rate  -  50 units
days in a month        -  25 days
cost of set up          -  Rs.2000/-
cost of holding inventory  -  Rs.20 per unit per year

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Economic batch quantity (EBQ), also called "optimal batch quantity" or economic production quantity, is a measure used to determine the quantity of units that can be produced at minimum average costs in a given batch or production run. Economic Production Quantity model (also known as the EPQ model) is an extension of the Economic Order Quantity model. The Economic Batch Quantity model, or production lot-size model, is similar to the EOQ model in that an optimum is to be calculated for the batch quantity to be produced.
In working with this EBQ model, principal assumptions are:
•   The demand (D) is known and constant within a certain period of time.
•   The unit cost of the inventory item (U) is constant.
•   The annual holding-cost per unit (Ch) is constant.
•   The setup-cost per batch (C) is constant.
•   The production time (tp) is known and constant.
•   There is one kind of product.
•   There is no interaction with other products.
•   The aspect of time does not play a role, just the setup time does.
•   The setup cost is constant and does not act upon the batch quantity.
Variables
•   K = setup cost
•   D = demand rate
•   F = holding cost
•   T = cycle length
•   P = production rate
Formula:

2X12000X2000
EBQ=square root of  -------------------------------------
20
=   1549  units
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Q.No.2. The annual demand of product is 4800 units. The ordering cost per order is Rs.400 and the carrying cost is Rs.5 per unit per year:

(a) Economic Order Quantity
(b) Number of order per year
(c) Time between consecutive order

2X 4800 X 400
EOQ = SQUARE ROOT  OF =---------------------------------------------------
5

EOQ = SQUARE ROOT  OF  =  768,000   =  876.35
(a) Economic Order Quantity  = 877
(b) Number of order per year  = 5.5
(c) Time between consecutive order  = 2 MONTHS

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