Managing Operations Across the Supply Chain 1st Edition by Morgan Swink,Steven Melnyk,Bixby Cooper, Janet Hartley

Exercise 21

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 cost $5/yard to produce.Annual demand for this style is 120,000 yards.Bryson Mills produces carpet 300 days per year.The production process is most efficient when 4,000 yards/day are produced.Inventory carrying cost is estimated at 20% annually.What should be the production order quantity?