Question: The production manager for Dell Computers is wanting to make sure that his facility is producing the XL85 computer at the lowest inventory cost. The

The production manager for Dell Computers is wanting to make sure that his facility is producing the XL85 computer at the lowest inventory cost. The demand for this computer has been relatively constant at about 10,000 units a year. The production rate for this product is 200 units per day. Each time the production begins, the setup cost is $125 to move materials into place, reset the assembly line, and clean the equipment. The holding cost of a computer is $50 per unit per year. Assuming there are 250 working days per year, the daily demand is 40 per day. What is the EPQ?

	A.	213.809
	B.	200
	C.	395.284
	D.	250
	E.	278.5

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