Bryson Carpet Mills produces a variety of different carpets. Changing from production of one carpet to another involves a setup cot of $1,000. One particular carpet costs $5 per yard to produce. Annual demand for this style is 120,000 yards. BCM produces carpet 300 days per year. The production process is most efficient when 4,000 yards per day are produced. Inventory carrying cost is estimated at 20% annually.
Given the information above, on a cost basis, what is the optimum run size for the carpets? ____
How many batches of the carpets will be run each year? __________
At EPQ, what will be the maximum inventory for each run cycle (batch)?______________
On average, how many yards of carpets will the factory have in its inventory? ____________
For each production run, over how many days will the factory be producing carpets (round up to a full day)? ___________
How many days (round up to a full day) will the maximum inventory last? _____________