In this case, as well, it is assumed that demand is given previously and is maintained on a uniform note, lead time is taken to be nil, and no amount of shortages are allowed. Also, it is to be noted that in case of items that are produced, amount should be adequate for meeting the demands for a specific part of inventory cycle.
It is given that a supply of 10000 bolts is to be made to a customer by a particular producer. It is seen that during the production process, close to 20000 bolts is to be produced. If the setting up cost is taken to be Rs 20, while cost of holding up that bolt in a stock is 3 paise on an annual basis, what should be the frequency of that production process?
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