Choose the one alternative that best completes the statement or answers the question.
-Find the optimum number of batches (to the nearest whole number) of an item that should be produced annually (in order to minimize cost) if 50,000 units are to be made, it costs $ 4 to store a unit for one year, and it costs $ 500 to set up the factory to produce each batch. Assume that units of this item will be sold off throughout the year, so the cost equation will use the average cost.
A) 10 batches
B) 12 batches
C) 14 batches
D) 16 batches

Question

Choose the one alternative that best completes the statement or answers the question. 
-Find the optimum number of batches (to the nearest whole number) of an item that should be produced annually (in order to minimize cost) if 50,000 units are to be made, it costs $ 4 to store a unit for one year, and it costs $ 500 to set up the factory to produce each batch. Assume that units of this item will be sold off throughout the year, so the cost equation will use the average cost.
A) 10 batches
B) 12 batches
C) 14 batches
D) 16 batches

Quizplus · Accepted Answer

The Answer of Choose the one alternative that best completes the statement or answers the question. 
-Find the optimum number of batches (to the nearest whole number) of an item that should be produced annually (in order to minimize cost) if 50,000 units are to be made, it costs $ 4 to store a unit for one year, and it costs $ 500 to set up the factory to produce each batch. Assume that units of this item will be sold off throughout the year, so the cost equation will use the average cost.
A) 10 batches
B) 12 batches
C) 14 batches
D) 16 batches

Choose the One Alternative That Best Completes the Statement or Answers