Answer: Q = 6,440
Step-by-step explanation:
Annual demand = D = 12,200
Setting up cost = O = $51
Production rate per year = P = Operating days × Producing capability
= 300 days a year × 100 per day
= 30,000
Holding cost per year = H = $0.05 per light


= 0.4
Therefore,
Optimal size of the production run, Q



= 6,440.49
Q = 6,440