Scenario C.1 Jerry Allison Is in Charge of Production for a Small

question 28

Multiple Choice

Scenario C.1
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 C.1. If Jerry chooses to produce batches dictated by the economic production lot size (ELS) model, how many days elapse between the start of consecutive production runs (what is the time between runs or TBO) ?

• A) fewer than or equal to 8 days
• B) greater than 8 days but fewer than or equal to 10 days
• C) greater than 10 days but fewer than or equal to 12 days
• D) greater than 12 days