A toy manufacturer makes its own wind-up motors, which are then put into its toys. While the toy manufacturing process is continuous, the motors are intermittent flow. Data on the manufacture of the motors appears below.Annual demand (D) = 50,000 units Daily subassembly production rate = 1,000Setup cost (S) = $85 per batch Daily subassembly usage rate = 200Carrying cost = $.20 per unit per yearTo minimize cost, how large should each batch of subassemblies be?
