The XYZ Manufacturing Company makes a special metal bracket that costs $10 per unit.
XYZ makes 20,000 units per day on its casting machine, and setup costs are $600 per run.
The annual cost of storing each item is estimated at 80 cents in interest expense, .08*$10 = $.80, plus 70 cents in warehouse expense per unit per year, or $1.50 total holding costs. Demand is assumed to be a constant 8000 units per day during the production cycle. Find the optimal run size and total inventory costs for producing one million units per year.