A Product Has Annual Demand of 100,000 Units

Multiple Choice

A product has annual demand of 100,000 units. The plant manager wants production to follow a four-hour cycle. Based on the following data, what setup cost will enable the desired production cycle? d = 400 per day (250 days per year) , p = 4000 units per day, H = $100 per unit per year, and Q = 200 (demand for four hours, half a day) .

A) $2.00
B) $7.20
C) $18.00
D) $64.00
E) $1,036.80