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Pointe au Chien Containers,Inc. ,manufactures in batches,and the manufactured items are placed in stock.Specifically,the firm is questioning how best to manage a specific wooden crate for shipping live seafood,which is sold primarily by the mail/phone order marketing division of the firm.The firm has estimated that carrying cost is $4 per unit per year.In addition,annual demand = 60,000 units,and setup cost is $300.The firm currently plans to satisfy all customer demand from stock on hand.Demand is known and constant.The production rate is nearly instantaneous.
a.What is the cost minimizing size of the manufacturing batch?
b.What is the total annual holding and setup cost of this solution?
Years
A measurement of time equal to 365 days (or 366 days in a leap year), used to denote the duration or age of something.
Insurance Annuity
An insurance product that pays out income, typically used as a retirement strategy to provide individuals with a steady income in their post-work years.
Rate of Return
Net profit or net loss from an investment during a specified time span, presented as a percentage of the investment's initial financial input.
Monthly Payments
Regular payments made every month on a loan or mortgage over a set period, often including interest and principal.
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