The Setup Cost to Make a Carpet Is $20 Per

question 2

Multiple Choice

The setup cost to make a carpet is $20 per setup.The holding cost is $2.00 per yard per year,and the annual demand is 12,000 yards.The manufacturing facility operates 300 days,and 120 yards of the carpet are produced per day.Given this information,which of the following statements is true?

• A)The optimal production quantity is 600.
• B)The optimal production quantity is 500.
• C)The optimal production quantity is 400.
• D)The optimal production quantity is 300.

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Definitions:

Supply Chain

The system of organizations, people, activities, information, and resources involved in moving a product or service from supplier to customer.

Product Design

The process of creating a new product to be sold by a business to its customers, focusing on specifications, aesthetics, and usability.

Planning

The process of setting goals, developing strategies, and outlining tasks and schedules to achieve the goals.

Product/Service Quality

The measure of excellence or state of being free from defects, deficiencies, and significant variations, assessed by comparing a product or service to established standards.