INVENTORY MANAGEMENT SHOW THE SOLUTION AND FORMULA USING EXCEL.

4. A company uses a certain part in the assembly of sets of electronic equipment at the rate of 8,000 per year. Each part has a value of $18. The company estimates that the cost of holding inventory is 20% of the value of the item per year. The company can produce the part on either of two machines. Machine A has a setup cost of $200; machine B has a setup cost of only $100. However, it costs 10 cents more per unit to produce using machine B than it does using machine A. Which machine should the company use? What is the optimum lot size