Hi,Pls help with questions a & b highlihted in green.Ty. Explain how Tyler should plan to produce the candy in his bakery based on the informationhe obtained below from the Production Lot model:a. how much to produceb. When to produceTyler decides to use the Production Lot Model to estimate the amount of candy he shouldprepare in advance for selling at his bakery. The sugar candy he creates can last for a longtime with proper packaging and is fairly.easy to store in inventory if required. He runs somecalculations based upon the market demand and his production capacity as follows:• The Production Capacity for sugar candies is 12 Ibs. per month• Monthly Demand is estimated at 10 lbs. per month with the demand rate expectedto be constant through the year• Cost of setting up the production line (sugar, flavoring, heating equipment, etc.) isexpected to be around $10 for raw materials and distribution of work with a leadtime of 4 days.• The manufacturing cost per pound of cạndy is $5.00, which includes wages,electricity costs, and costs of raw materials.• The annual holding cost is figured at a 20% rate, which is pretty.standard in thisbusiness• The number of working days per year are 300Fill in the following table based on this information:# Optimal Inventory Policy1 Production Lot Size Q*Answer Type120Ibs.2 Annual Inventory Holding Cost H$10dollars3 Annual Setup Cost O$10dollars4 Total Annual Cost TC$20dollarsMaximum Inventory Level20Ibs.6 Average Inventory Level7 Reorder Point r8 Number of Orders Per Year (D/Q")9 Cycle Time (Days) T10Ibs.1.60Ibs.1300days

Inventory refers to the stock that the company held or is not sold yet and is expected to be sold…

Answered: ls help with questions a & b highlihted…

Business

Accounting

ls help with questions a & b highlihted in green.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter6: Merchandising Transactions

Section: Chapter Questions

Problem 2TP: You have decided to open up a small convenience store in your hometown. As part of the initial...

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