Scenario C.1 Jerry Allison Is in Charge of Production for a Small

Multiple Choice

Scenario C.1
Jerry Allison is in charge of production for a small producer of plumbing supplies. The cricket model has an estimated annual demand of 12,000 units and can be produced at a production rate of 90 units per day. The company produces (and sells) the cricket 300 days per year. Setup cost to produce this model averages $22 and the item has a holding cost of $3 per unit per year.
-Use the information in Scenario C.1. What is the economic production lot size (ELS) ?

A) fewer than or equal to 400 units
B) greater than 400 units but fewer than or equal to 480 units
C) greater than 480 units but fewer than or equal to 500 units
D) greater than 500 units