A manufacturer of hospital supplies has a uniform annual demand for 80,000 boxes of bandages. It costs $10 to store one box of bandages for one year and $160 to set up the plant for production. How many times a year should the company produce boxes of bandages in order to minimize the total storage and setup costs?

50 times

Explanation:

For the computation of the number of times company should produce a year first we need to determine the EOQ which is shown below:-

=

= 1,600

Now,

we will assume a number of times in a year is x, so that the company manufacture bangles

=

= 50 times

Therefore for computing the number of times the company should produce a year we simply applied the above formula.

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