The Grinell Machine Shop makes a line of metal tables. Some of these tables are carried in finished goods inventory. A particular table has the following characteristics:
Sales = 300 per year
Setup cost = $1200 per setup (this includes machine setup for all the different parts in the table)
Carrying cost = 20 percent per year
Item cost = $25
a. How many of these tables should be made in a production lot?
b. How often will production be scheduled?
c. What factors might cause the firm to schedule a lot size different from the one you have computed?