SK Bearing Ltd. is committed to supply 36,000 bearing per annum to Century Fans Ltd on a steady daily basis. It is estimated that it costs 25 Cents as inventory holding cost per bearing per month and that the set- up cost per run of bearing manufacture is $ 350.

Required:

(a) What should be the optimum run size for bearing manufacture?

(b) What should be the interval between two consecutive optimum runs?

(c) Assuming that the company has a policy of manufacturing 9,000 bearings per run, how much extra costs the company would be incurring as compared

to the optimum run suggested in (a) above?