Question

1. A company has an annual demand for a product of 2000 units, a carrying cost of $20per unit per year, and a setup cost of $100. Through a program of setup reduction, thesetup cost is reduced to $20. Run costs are $2 per unit. Calculate:
A. The EOQ before setup reduction.
B. The EOQ after setup reduction.
C. The total and unit cost before and after setup reduction.

Answer 1

Answer:

B the EOQ after setup reduction.