The setup cost to make carpets is $20 per setup. The holding cost is $1.75 per yard per year, and the annual demand is 12,000 yards of carpet per year. The manufacturing facility operates 300 days, and 120 yards of the carpet are produced per day. What is the total annual holding cost under the economic production quantity policy?
a. $374.17
b. $458.26
c. $561.25
d. $1,122.50
a. $374.17
Business
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