Assume that a production line operates such that the production lot size model described in Quantitative Methods, Section 14.2 is applicable and has the following parameters: D = 7500 units per year Co = $50 per setup Ch = $2 per unit per year.

Problem 2a. Compute the minimum cost production lot size for each of the following production rates. What is the EQO, give the same parameters?

8,000 units per year

15,000 units per year

50,000 units per year

100,000 units per year

Given the same parameters, what is the EOQ?