IM Problem 1 Bryson Carpet Mills produces a variety of different carpets. Changing from production of one carpet to another involves a setup cot of $1,000. One particular carpet costs $5 per yard to produce. Annual demand for this style is 120,000 yards. BCM produces carpet 300 days per year. The production process is most efficient when 4,000 yards per day are produced. Inventory carrying cost is estimated at 20% annually.

a) What is the optimum production quatity? (Should be 16,330)

b) What is the average holding costs per year? ($7,348.5)

c) How many production runs of this particular carpet will BCM have in a year? (7.348) approximately

d) What is the total setup plus holding cost for BCM each year? (14,696.88)