Consider a company using the economic production quantity model. a. Derive the percent change of total cost if the lot size is different than the optimal by a factor of (1+z). b. How would the total cost change if the holding cost in the model is reduced 30 percent? c. Derive the percent cost difference if decide to increase production rate by a factor of (1+w)
Consider a company using the economic production quantity model. a. Derive the percent change of total cost if the lot size is different than the optimal by a factor of (1+z). b. How would the total cost change if the holding cost in the model is reduced 30 percent? c. Derive the percent cost difference if decide to increase production rate by a factor of (1+w)
Chapter9: Production Functions
Section: Chapter Questions
Problem 9.7P
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Transcribed Image Text:Consider a company using the economic
production quantity model.
a. Derive the percent change of total cost if the
lot size is different than the optimal by a factor
of (1+z).
b. How would the total cost change if the
holding cost in the model is reduced 30
percent?
c. Derive the percent cost difference if decide to
increase production rate by a factor of (1+w)
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