Answer:
Option (D) is correct.
Explanation:
A = Annual demand = 400 x 12
= 4800 boxes
p = 36 boxes per day
Operating days per month = 20 days
d = daily usage rate = 400 ÷ 20
= 20 boxes
S = setup cost per lot = $60 per lot
H = Holding cost ($) = $2 per box per month = $24 per box per year
[tex]Q=\sqrt{\frac{2AS}{H}(\frac{p}{p-d})}[/tex]
[tex]Q=\sqrt{\frac{2\times4800\times60}{24}(\frac{36}{36-20})}[/tex]
[tex]Q=\sqrt{24,000\times2.25}[/tex]
[tex]Q=\sqrt{54,000}[/tex]
Q(economic production quantity) = 232 boxes