Examine what should be the production order quantity

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Reference no: EM131919401

Question: Bryson Carpet Mills produces a variety of different carpets. Changing from production of one carpet to another involves a setup cost of $1,000. One particular carpet costs $5 per yard to produce. Annual demand for this style is 120,000 yards. Bryson Carpet Mills produces carpet 300 days per year. The production process is most efficient when 4,000 yards per day are produced. Inventory carrying cost is estimated at 20 percent annually. What should be the production order quantity?

Reference no: EM131919401

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