Carol Cagle has a repetitive manufacturing plant producing trailer hitches in Arlington, Texas. The plant has an average inventory tumover 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 colt $30 per hour Annual holding cost $12 per unit Daily production 992 units/hour day Annual demand 25,300 (275 days each x daily demand of 92 units) Desired lot size 124 units (one hour of production)