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=