Managing Engineering and Technology 6th Edition by Lucy Morse,Daniel Babcock

Exercise 1

If it costs $2.00 per unit to store an item for one year and $40.00 setup cost every time you produce a lot, and you use 1,000 units per year, how many lots of what size should be manufactured each year? ( b ) How would your answer change if the setup cost can be reduced to $10.00?