Question
Radovilsky Manufacturing Company makes flashing lights for toys. The company operates its production 300 days a year. It has orders for about 12, 000 units
Radovilsky Manufacturing Company makes flashing lights for toys. The company operates its production 300 days a year. It has orders for about 12, 000 units per year and has the capability of producing 100 per day. Setting up the light production costs $50. The cost of each light is $1. The holding cost is $0.1 per light per year. (30pts)
a) What is the optimal size of production run? (10 pts)
b) What is the average holding cost per year? (10 pts)
c) What is the average setup cost per year? (5 pts)
d) What is the total cost per year, including the cost of the lights? (5 pts)
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