Drolet Manufacturing Company, in Saint-Hubert, Quebec, makes flashing lights for toys. The company operates its production facility

Question:

Drolet Manufacturing Company, in Saint-Hubert, Quebec, makes flashing lights for toys. The company operates its production facility 300 days per year. It has orders for about 12 000 flashing lights per year and has the capability of producing 100 per day. Setting up the light production costs $50. The cost of each light is $1. The holding cost is $0.10 per light per year.
a) What is the optimal size of the production run?
b) What is the average holding cost per year?
c) What is the average setup cost per year?
d) What is the total cost per year, including the cost of the lights?
Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Operations Management

ISBN: 978-0132687584

1st Canadian Edition

Authors: Jay Heizer, Barry Render, Paul Griffin

Question Posted: