Jerry Allison Is in Charge of Production for a Small

question 9

Multiple Choice

Jerry Allison is in charge of production for a small producer of plumbing supplies. The cricket model has an estimated annual demand of 12,000 units and can be produced at a production rate of 90 units per day. The company produces (and sells) the cricket 300 days per year. Setup cost to produce this model averages $22 and the item has a holding cost of $3 per unit per year.
-Use the information in Scenario D.1.What is the economic production lot size (ELS) ?

• A) Fewer than or equal to 400 units
• B) Greater than 400 units but fewer than or equal to 480 units
• C) Greater than 480 units but fewer than or equal to 500 units
• D) Greater than 500 units

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