ITEMS 18 to 20 ARE BASED ON THE FOLLOWING INFORMATION: The following information pertains to Emy Manufacturing Corporation's Product X: Annual demand 33,750 units Annual cost to hold one unit of inventory Setup cost (or the cost to initiate a production run) Beginning inventory of product X P15 P500 At present, the Company produces 2,250 units of Product X per production runt for a total of 15 production runs per year. The company is considering to use the EOQ model to determine the economic lot size and the number of production runs that will minimize the total inventory carrying cost and setup cost for Product X. 18. At present, the company's total annual inventory costs is a. P 7,500. b. P16,875. c. P24,375. d. P22,500. 19. If the EOQ model is used, the economic lot size is a. 2,250 units. b. 1,500 units. c. 2,250,000 units. d. P1,500. 20. If the EOQ model is used, the number of production runs should be c. 67.5 runs. d. 22.5 runs. a. 15 runs. b. 1,500 units.

ITEMS 18 to 20 ARE BASED ON THE FOLLOWING INFORMATION: The following information pertains to Emy Manufacturing Corporation's Product X: Annual demand 33,750 units Annual cost to hold one unit of inventory Setup cost (or the cost to initiate a production run) Beginning inventory of product X P15 P500 At present, the Company produces 2,250 units of Product X per production runt for a total of 15 production runs per year. The company is considering to use the EOQ model to determine the economic lot size and the number of production runs that will minimize the total inventory carrying cost and setup cost for Product X. 18. At present, the company's total annual inventory costs is a. P 7,500. b. P16,875. c. P24,375. d. P22,500. 19. If the EOQ model is used, the economic lot size is a. 2,250 units. b. 1,500 units. c. 2,250,000 units. d. P1,500. 20. If the EOQ model is used, the number of production runs should be c. 67.5 runs. d. 22.5 runs. a. 15 runs. b. 1,500 units.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter17: Long-term Investment Analysis

Section: Chapter Questions

Problem 3E

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