All of the demand data remains the same as above. That is,

Royal Paper Co.'s South Philly wholesale store sells P75 line of high quality photo printer paper. The monthly demand for P75 paper is very stable, at 4,000 packets a month.

Royal Paper wants to set up an in-house production facility with no variability in lead time. The in-house setup cost will be $400 per production run. The facility will have a capacity of producing 8,000 packets a month.

Each packet of P75 will now cost $5 to produce in-house in material cost, and Royal Paper has an annual cost of carrying inventory at 24% of the cost price.

How many packets should Royal Paper Co order to make in each lot of P75 from the in-house production facility?

Group of answer choices

1,826

8,000

4,000

2,309