Radovilsky Manufacturing Company, in Hayward, California,makes flashing lights for toys. The company operates its productionfacility
300300
days per year. It has orders for about
11 comma 60011,600
flashing lights per year and has the capability of producing
100100
per day. Setting up the light production costs
$5151.
The cost of each light is
$0.950.95.
The holding cost is
$0.150.15
per light per year.
a) What is the optimal size of the production run?
b) What is the average holding cost per year?
c) What is the average setup cost per year?
d) What is the total cost per year, including the cost of thelights?
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