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Sharpe Cutter is a small company that produces specialty knives for paper cutting machinery. The annual...

Sharpe Cutter is a small company that produces specialty knives for paper cutting machinery. The annual demand for a particular type of knife is 100,000 units. The demand is uniform over the 250 working days in a year. Sharpe Cutter produces this type of knife in lots​ and, on​ average, can produce 500 knives a day. The cost to set up a production lot is ​$320, and the annual holding cost is ​$1.30 per knife.

a. Determine the economic production lot size​ (ELS).

The economic production lot size is 15689 knives. ​(Enter your response rounded to the nearest whole​ number.)

b. Determine the total annual setup and inventory holding cost for this item.

The total annual setup and inventory holding cost is 4079.35

​(Enter your response rounded to two decimal places.​)

c. Determine the​ TBO, or cycle​ length, for the ELS.

The cycle length is _____days. ​(Enter your response rounded to the nearest whole​ number.)

business   Operations-Management   
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Economic Production Quantity is the number of unit that is added to the inventory which minimize the total inventory cost. It maintain a balance between ordering costs and carrying costs.

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