Paccar Winch makes winch components for its different product lines. The firm operates its production facility 300 days per year. It has orders for about 12,000 winch components per year and has the capability of producing 100 per day. Setting up the winch production costs $50. The cost of each winch component is $1. The holding cost is $0.10 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?
