A company is about to begin production of a new product. The manager of a department that is asked to produce one of the components wants to know if there is enough machine time available. The machine will produce the item at a rate of 220 units a day. Eighty-five units will be used daily in assembling the final product. The company operates five days a week, 50 weeks a year. The manager estimates that it will take almost a full day to get the machine ready for a production run, at a cost of $250. Inventory holding cost will be $8 per unit per year. a. What production run quantity should be used to minimize total annual setup and holding cost? (Do not round intermediate calculations. Round the final answer to the nearest whole number.) Production run quantity = units b. What is the length of a production run (in days)? (Do not round intermediate calculations. Round the final answer to 2 decimal places.) Run length = days c. During production, at what rate will inventory build up? Rate = units d. If the manager needs to run another job between runs of this job, and needs a minimum of 9 days per cycle of this job for the other job, will there be enough time? Yes or No
A company is about to begin production of a new product. The manager of a department that is asked to produce one of the components wants to know if there is enough machine time available. The machine will produce the item at a rate of 220 units a day. Eighty-five units will be used daily in assembling the final product. The company operates five days a week, 50 weeks a year. The manager estimates that it will take almost a full day to get the machine ready for a production run, at a cost of $250. Inventory holding cost will be $8 per unit per year.
a. What production run quantity should be used to minimize total annual setup and holding cost? (Do not round intermediate calculations. Round the final answer to the nearest whole number.)
Production run quantity = units
b. What is the length of a production run (in days)? (Do not round intermediate calculations. Round the final answer to 2 decimal places.)
Run length = days
c. During production, at what rate will inventory build up?
Rate = units
d. If the manager needs to run another job between runs of this job, and needs a minimum of 9 days per cycle of this job for the other job, will there be enough time?
Yes or No
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