Lee is considering manufacturing many of the components. The cost to set up for producing a standard component is approximately $200 (considering labor, testing facilities, etc.).
Once set up they can produce at a rate of approximately 20 units /day (4,000 units per year) at a cost of $100 each.
Daily demand is forecast at 15 units. if the firm uses a 30% annual rate of inventory value for holding inventory:
[note: this question is the production run size or production run length (erl) related problem]
What is the total inventory carrying cost/year? (find the nearest value)