Great Buy Inc. manufactures and then sells the Modelx15 DVD Players. It costs GB Inc. $57 to produce a unit,and the estimated annual demand for DVD players is 4500 units.Great Buy Inc. used to hold 100 units safety stock to preventoccasional shortages. GB Inc. uses 15% rate of holding cost a year,and setting up its production line each time a production run isplanned costs $900. Production capacity for the DVD Player is 6000units. Currently , Great Buy Inc. produces in lots that meet twomonths of demand. Answer the following question.
1.
a) What is the total cost of the current policy ?
b) For the current policy of part 'a', what % of the time, theproduction line is not busy producing the DVD players?
