A Product Has Annual Demand of 1,000,000 Units

Multiple Choice

A product has annual demand of 1,000,000 units. The plant manager wants production to follow a two-hour cycle. Based on the following data, what setup time will enable the desired production cycle? d = 4000 units per day (250 days per year) , p = 8000 units per day, H = $60 per unit per year, Q = 1000 (demand for two hours) , and the hourly labor rate is $30.

A) 30 minutes
B) 0.5 minutes
C) 15 minutes
D) 2.85 minutes
E) 5.7 minutes