A part is produced in batches size of 2500 pieces. Annual demand is 45,000 pieces, and piece cost is Rs.6.50 Setup time to run a batch is 1.5 hr, cost of downtime on the affected equipment is figured at Rs.220/hr, and annual holding cost rate is 30%. (a) What would the annual savings be if the product were produced in the economic order quantity? (b) How much would total inventory costs be reduced if the economic batch quantity is 2500 units
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