Ashop that makes candles offers a scented candle, which has a monthly demand of 360 boxes. candles can be produced at a rate of 36 boxes per day. the shop operates 20 days a month. assume that demand is uniform throughout the month. setup cost is $60 for a run, and holding cost is $2 per box on a monthly basis.

determine the following:

(a) the economic run size
(b) the maximum inventory
(c) the number of days in a run

the daily usage rate (u) is 18 boxes. the daily production rate (p) is 36 boxes.

Adrawback of short-term contracting as an alternative to making a component in-house is thata. it is the most-integrated alternative to performing an activity so the principal company has no control over the agent. b. the supplying firm has no incentive to make any transaction-specific investments to increase performance or quality. c. it fails to allow a long planning period that individual market transactions provide. d. the buying firm cannot demand lower prices due to the lack of a competitive bidding process.