Ferrari is an Italian luxury sports car manufacturer based in Maranello, Italy. At its manufacturing facility, it produces subcomponents at a rate of 600 per day and uses these subcomponents at a rate of 25000 per year (250 working days) Holding costs is $4 per item per year, and set up( ordering) costs are $60 per order.
Q1. What is the economic order quantity?
Q2. How Many production runs per year will be made?
Q3. What will be the maximum inventory level?
Q4. What percentage of time will the facility be producing components?
Q5. what is the annual cost of setting up ( ordering) and holding inventory?
