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

question 18

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 the batch size suggested by the economic production lot size (ELS) model, what is the annual cost?

• A) less than or equal to $900
• B) greater than $900 but less than or equal to $950
• C) greater than $950 but less than or equal to $1,000
• D) greater than $1,000

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Definitions:

Temperature

A physical quantity that expresses the subjective perceptions of hot and cold, measured with a thermometer.

Temperature Rises

An increase in the degree of heat present in a substance or environment, often measured in Celsius or Fahrenheit.

Pressure

The force exerted per unit area on the surface of an object, often measured in pascals (Pa) or atmospheres (atm).

Temperature Rises

An increase in the average kinetic energy of the particles in a substance, leading to an increase in its temperature.