Question: Holstein Computing manufactures an inexpensive audio card (Audio Max) for assembly into several models of its microcomputers. The annual demand for this part is 100,000

Holstein Computing manufactures an inexpensive audio card (Audio Max) for assembly into several models of its microcomputers. The annual demand for this part is 100,000 units. The annual inventory carrying cost is $5 per unit and the cost of preparing an order and making production setup for the order is $700. The company operates 250 days per year. The machine used to manufacture this part has a production rate of 1600 units per day.

a. Calculate the optimum order lot size

e. What is the total annual cost of preparing the orders and making the setups for Audio Max?

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