The setup cost for the production of knobs is 60 the firm

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Reference no: EM13390894

A radio manufacturer uses 60000 knobs per year for its popular car stereo series. The firm makes its own knobs, which it can produce at a rate of 600 per day. The radios are assembled uniformly over the entire year. The unit cost of an item is $8 and the carrying rate per year is 15% of the item cost. The setup cost for the production of knobs is $60. The firm operates 300 days per year. Determine each of the following.

a) optimal run size (production quantity)

b) minimum annual carrying cost (show work)

c) minimum annual setup cost (show work)

d) time of usage (cycle time)

e) time of production (run time)

Reference no: EM13390894

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