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Business Finance

A manufacturer of laptop computers operates a plant with an annual capacity of 88,400,000 laptop units. One of its models is expected to sell 5200000 units in the coming year.

How large should each product lot be if it costs $500 to change production from one model to another. Assume that the manufacturer values each laptop unit at $250 dollars and it has a holding rate of 4%. You should round your answer up to the nearest laptop unit.

For Company B, using the Economic Production Lot Size Model, we find we should order