1.) Carol Cagle has a repetitive manufacturing plant producing trailer hitches in Arlington, Texas. The plant has an average inventory turnover of only 12 times per year. He has therefore determined that he will reduce his component lot sizes. He has developed the following data for one component, the safety chain clip:

Setup labor cost	$30 per hour
Annual holding cost	$13 per unit
Daily production	992 units/8 hour day
Annual demand	31,200 (260 days eachdaily demand of 120 units)
Desired lot size	124 units (one hour of production)

To obtain the desired lot size, the set-up time that should be achieved =

2.)Given the following information about a product, at Michael Gibson's firm, what is the appropriate setup time?

Setup labor cost	$30.00 per hour
Annual holding cost	$15 per unit
Daily production	1,000 units/day
Annual demand	29,000 (290 days eachdaily demand of 100 units)
Desired lot size	150 units

Setup time =