Suppose the demand of a product in a retail store is 20000 per year and it occurs at a
constant rate. Placement of an order of this product to an outside supplier by the store is
$180. The super market authority has calculated the inventory holding cost per unit per
year as 95 cents. Assuming no occurrence of shortages of the product.
If the production rate of processing the product is 30000 per year and the set up cost per
set up is $300 and the product is allowed to sell during production, then
a) Determine the Economic Production Quantity (EPQ)
b) The number of deliveries per year and the cycle time of a lot
c) The annual minimal total cost of set up and inventory holding of delivering EPQ.

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