Question

apter 7 wuZ Saved Help Save & Exit Sut 7 Bryson Carpet Mills produces a variety of different carpets. Changing from production of one carpet to another involves a setup cost of $500. One particular carpet costs $8/yard to produce. Annual demand for this style is 50,000 yards. Bryson Mills produces carpet 200 days per year. The production process is most efficient when 2,000 yards/day are produced. Inventory carrying cost is estimated at 20 percent annually. What should be the production order quantity? Skipped Multiple Choice eBook References 4,675 yards O 5,976 yards 8,750 yards 2,500 yards

Answer 1

Swor! in data Annual demand a) 50,000 Yarals soo Setup cost (3) Daily domand కం,000 so yord Doo 10 0,000 yards Anual domond • daya perver per day production : Cast of each carpet - carry out Production &do Quantity OxAXB V $8x01 - $ 8 = 80% 250 9000 5-)*80). Ox 50,000 xsoo $8 0.875 x 20) $ 50,000,000 $1.4 spwl 9t6 § option (B) 88 Correct