Probett Toy Company makes its own wind-up motors, which are then put into its toys. While the toy manufacturing process is continuous, the motors are intermittent flow. Demand is 2000 units per month, setup costs are $85 per batch, carrying costs are $2.00 per unit per year, daily subassembly production rate is 1000 units and daily subassembly usage rate is 400 units. To minimize cost, how large should each batch of subassemblies be?
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