What is the economic production quantity

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Reference no: EM131028722

Ram Manufacturing Company, in Hayward, California, makes LED flashing lights for toys. The company operates its production facility 300 days per year. It has orders for 12,000 flashing lights per year and has the capability of producing 100 per day. Setting up the light production costs $40. The cost of each LED light is $1. The holding cost is $.10 per light per year.

Please show work

a. What is the economic production quantity?

b. What is the total cost per year, including the cost of the lights?

Reference no: EM131028722

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