A manufacturer can produce 12000 bearings per day. The manufacturer

A manufacturer can produce 12000 bearings per day. The manufacturer received an order of 8000 bearings per day from a customer. The cost of holding a bearing in stock is Rs. 0.20 per month. Setup cost per production run is Rs. 500. Assuming 300 working days in a year, the frequency of production run should be

D = 8000 × 300 bearings/year
P = 12000 bearings/day
C = 8000 bearings/day
C_h = 0.12 × 12/year
C_O = 500/Production

Q* = √	2 × D × C_O	×		P
	C_h			P - C

⇒ √	2 × 240000 × 500	×		12000
	0.20 × 12			12000 - 8000

⇒ 54772.526

T =	Q*
	C

T ⇒ 6.84 days