Data for a particular job order are set-up time = 10 hours, run time — 1 minute per unit once the set-up is made, cP — $150 per set-up, cH = $0.12 per unit per year, R = 10,000 units, and EOQ = 5000 units.

a. What percent dilution in capacity would occur if production were actually in lots of Q — 1000 units instead of EOQ?

b. Suppose that the set-up time = 1 hour and cP = $15 per order; then EOQ —

1581 units. What percent dilution in capacity would occur if production is in lots of Q = 300 units instead of EOQ?