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Gerstein Company manufactures a line of deluxe office fixtures The annual demand for its miniature oak file is estimated to be 5000 units The annual cost of carrying one unit in inventory is P10

Gerstein Company manufactures a line of deluxe office fixtures. The annual demand for its miniature oak file is estimated to be 5,000 units. The annual cost of carrying one unit in inventory is P10, and the cost to initiate a production run is P1,000. There are no miniature oak files on hand, and Gerstein has scheduled four equal production runs of the miniature oak file for the coming year, the first of which is to be rum immediately. Gerstein has 250 business days per year. Assume that sales occur uniformly throughout the year and that production is instantaneous. The number of production runs per year of the miniature oak files that would minimize the sum of carrying costs and setup costs for the coming year is
A. 7                 C. 4
B. 2                 D. 5

Jun 20 2021 View more View Less

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