Question

Radovilsky Manufacturing​ Company, in​ Hayward, California, makes flashing lights for toys. The company operates its production facility 300 days per year. It has orders for about 12,300 flashing lights per year and has the capability of producing 95 per day. Setting up the light production costs ​$52. The cost of each light is $0.95. The holding cost is ​$0.05 per light per year.

​a) What is the optimal size of the production​ run? ______units ​(round your response to the nearest whole​ number).

​b) What is the average holding cost per​ year?_____​(round your response to two decimal​ places).

​c) What is the average setup cost per​ year? _____​(round your response to two decimal​ places).

​d) What is the total cost per​ year, including the cost of the​ lights? ​$_____​(round your response to two decimal​ places).

Answer 1