Problem 8 (10) A local company produces a programmable EPROM for several industrial clients. It has experienced a relatively fiat demand of 3000 units per year for the product. The EPROM is produced at a rate of 10,000 units per year. The accounting department has estimated that it costs $50 to initiate a production run, each unit costs the company $2 to manufacture, and the cost of holding is based on a 25 percent annual interest rate. a. Determine the optimal size of a production run, the length of each production run (5 points) Solution b. Determine the average annual cost of holding and setup. (3 points) e. What is the maximum level of the on-hand inventory of the EPROMS? (2 points) Attach File Browse Local Files Browne Content Collection