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The development price itself is such a huge barrier, it's just a very different business model than boeing's used to. our huge development programs are typically centered around commercial airplanes, military aircraft, where there is a lot of orders. and right now the foundation of the business is two bites a year.

Suppose a holiday inn hotel has annual fixed costs applicable to its rooms of $1.2 million for its 300-room hotel, average daily room rents of $50, and average variable costs of $10 for each room rented. it operates 365 days per year. the amount of operating income on rooms, assuming an occupancy* rate of 80% for the year, that will be generated for the entire year is *occupancy = % of rooms rented

The assumptions of the production order quantity model are met in a situation where annual demand is 3650 units, setup cost is $50, holding cost is $12 per unit per year, the daily demand rate is 10 and the daily production rate is 100. the production order quantity for this problem is approximately: