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 time will enable the desired production cycle? d = 400 per day (250 days per year) , p = 4000 units per day, H = $40 per unit per year, Q = 200 (demand for four hours, half a day) , and the hourly labor rate is $18.

A) 0.40 minutes
B) 24.0 minutes
C) 7.2 minutes
D) 40.0 minutes
E) 16.0 minutes