Macho Auto Company needs to produce 10,000 car chassis per year. Each is valued at $2,000. The

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Macho Auto Company needs to produce 10,000 car chassis per year. Each is valued at

$2,000. The plant has the capacity to produce 25,000 chassis per year. It costs $200 to set up a production run, and the annual holding cost is 25¢, per dollar of inventory. Determine the optimal production run size. How many production runs should be made each year?

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