Assume that a production line operates such that the production lot size model of is applicable. Given D = 6500 units per year, C_o = $115, and C_h = $2 per unit per year. Compute the minimum cost production lot size for each of the following production rates:

a.	8300 units per year
b.	10000 units per year
c.	34500 units per year
d.	100000 units per year

If required, round your answers to the nearest whole number.

a.	P = 8300	Q* = fill in the blank 1
b.	P = 10000	Q* = fill in the blank 2
c.	P = 34500	Q* = fill in the blank 3
d.	P = 100000	Q* = fill in the blank 4

Compute the EOQ recommended lot size using equation . If required, round your answers to the nearest whole number.

Q* = fill in the blank 5

What two observations can you make about the relationship between the EOQ model and the production lot size model?

Production Lot Size Q* is always

greaterless

than the EOQ Q* with the

samedifferent

D, C_o, and C_h values.

As the production rate P

increasesdecreases

, the recommended Q* decreases, but always remains

greaterless

than the EOQ Q*.