Question: ) Paccar Winch makes winch components for its different product lines. The firm operates its production facility three hundred and twenty days per year. It

) Paccar Winch makes winch components for its different product lines. The firm operates its production facility three hundred and twenty days per year. It has orders for about twelve thousand winch components per year and has the capability of producing one hundred and five per day. Setting up the winch production costs fifty dollars. The cost of each winch component is one dollar and twenty cents. The holding cost is ten cents per winch component per year.

a) What is the optimal size of the production run?

b) What is the average holding cost per year?

c) What is the average setup cost per year?

d) What is the total cost per year, including the cost of the winch components?

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