HAL Ltd., discussed in Problem 9, can produce the disk drive housings in the

Hamilton, Ontario, plant at a rate of 150 housings per month. The housings cost

HAL$85 each to produce, and the setup cost for beginning a production run is $700.

Assume an annual interest rate of 28 percent for determining the holding cost.

a. What is the optimal number of housings for HAL to produce in each production

run?

b. Find the time between initiation of production runs, the time devoted to production,

and the downtime each production cycle.