Concept explainers
Production Costs Over at Duffin House, Marjory Duffin is trying to decide on the size of the print runs for the bestselling new fantasy novel Larry Plotter and the Simplex Method. The following model shows a calculation of the total cost to produce a million copies of the novel, based on an analysis of setup and storage costs:
a. What would be the effect on cost if the run size was increased from 20,000 to 30,000?
b. Would increasing the run size in further steps of 10,000 result in the same changes in the total cost? Explain.
c. What approximate run size would you recommend that Marjory Duffin use for a minimum cost?
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