# B totalannual cost q s 2 2q c 114891 10445 2 2 0 5

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Which approach would you recommend to Westside Auto, using back orders or not? Why?
2. Wilson Publishing Company produces books for the retail market. Demand for a current book is expected to occur at a constant annual rate of 7200 copies. The cost of one copy of the book is \$14.50. The holding cost is based on an 18% annual rate, and producton setup costs are \$150 per setup. The equipment on which the book is produced has an annual producton volume of 25,000 copies. Wilson has 250 working days per year, and the lead tme for a producton run is 15 days. Use the producton lot size model to compute the following:a) (2 pts) Minimum cost producton lot size=
b) (2 pts) Number of producton runs per year=
5c) (2 pts) Cycle tme=37daysd) (2 pts) Length of a producton run= 10.73dayse) (2 pts) Maximum inventory=762.14unitsf) (6 pts) Total annual cost= \$1059.89g) (2 pts) Reorder point= 6.6unitsa)To find cost producton lot size, we must first figure out consumpton and producton. We are given:D= 7200 copiesPrice= \$14.50H= \$14.50* 18%= \$2.61S= \$150Annual producton volume= 25,000 copiesWorking days= 250Lead tme= 15 daysUsage Rate:Consumpton= Demand/Working days= 7200/250= 29 units/ dayProducton= Annual Producton Rate/ Number of working days= 25000/ 250= 100 units
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