The Setup Cost to Make a Carpet Is $20 Per

question 97

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)With an optimum order quantity of 600,the length of the production run in days is 5.
• B)With an optimum order quantity of 500,the length of the production run in days is 6.
• C)With an optimum order quantity of 400,the length of the production run in days is 7.
• D)With an optimum order quantity of 300,the length of the production run in days is 8.

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