1. (a) A company is having an extensive and modern heat-treatment fiber cable jacketing facility which is used to produce a number of specialty cable items. The heat-treatment facility has two important characteristics one, it has a large set up cost and another, once set up is completed, it produces at a steady and known rate.

For the FY 2020-21, the company estimated its daily demand for a particular kind of optical fiber network cables (NC) at 200 NCs per day while the production capacity is 400 NCs per day. It further estimated holding cost of 10% of average inventories. Each network cable (NC) costs the company Rs. 500. The total set up cost estimated is: Total Setup Cost = 5000+100n; n is number of set ups during 2020-21.

On the basis of the information given, you are required to answer the following:

1. Determine the optimum number of NCs to be produced in each production run.
2. Determine the total set-up costs for the batch size calculated above (i) for the FY 2020-21.