Question 2. A company is about to begin production of a new product. The manager of the department that produces one of the components for the product wants to know how often the machine used to produce the item will be available for other work. The machine will produce the item at a rate of 200 units a day. Eighty units are used daily in assembling the final product. Assembly takes place 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 $300. Inventory holding costs will be $10 per unit. Round to the nearest whole number a. What run quantity will minimize total annual costs (EPQ)? b. What is the length of a production run in days? c. During production, how many units a day go to inventory as opposed to into production? d. What is the cycle time for optimal run time?
Question 2. A company is about to begin production of a new product. The manager of the department that produces one of the components for the product wants to know how often the machine used to produce the item will be available for other work. The machine will produce the item at a rate of 200 units a day. Eighty units are used daily in assembling the final product. Assembly takes place 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 $300. Inventory holding costs will be $10 per unit. Round to the nearest whole number a. What run quantity will minimize total annual costs (EPQ)? b. What is the length of a production run in days? c. During production, how many units a day go to inventory as opposed to into production? d. What is the cycle time for optimal run time?
Purchasing and Supply Chain Management
6th Edition
ISBN:9781285869681
Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Chapter16: Lean Supply Chain Management
Section: Chapter Questions
Problem 10DQ: The chapter presented various approaches for the control of inventory investment. Discuss three...
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