Solve the Problem. -Find the Optimum Number of Batches (To the Nearest Whole

question 87

Multiple Choice

Solve the problem.
-Find the optimum number of batches (to the nearest whole number) of an item that should be produced annually (in order to minimize cost) if 60,000 units are to be made, it costs $4 to store a unit for one year, and it
Costs $600 to set up the factory to produce each batch. Assume that units of this item will be sold off throughout
The year, so the cost equation will use the average cost.

• A) 16 batches
• B) 14 batches
• C) 12 batches
• D) 10 batches

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Definitions:

Terminate

To bring to an end; in legal contexts, it often refers to ending a contract or employment.

Contract

An agreement between two or more parties that holds legal validity and can be enforced in a court of law.

Disregard

To pay no attention or too little attention to; to ignore or overlook intentionally.

Down Payment

A portion of the purchase price paid to the seller at the time of sale.