App 9A In-Class Activities templates
xlsx
keyboard_arrow_up
School
Sheridan College *
*We aren’t endorsed by this school
Course
55
Subject
Industrial Engineering
Date
Jan 9, 2024
Type
xlsx
Pages
7
Uploaded by AmbassadorThunderLeopard27
Exercise 9A-1 Production Lot Size
Summary of initial data
Annual production
2,000 units
Q
Setup costs
$400
P
Carrying costs
$10 per unit
C
Percentage on hand
50% half of the EOP assuming the same amount is prod
Required:
Subtotal (under sqrt)
Square root
EPLS
Purchase order cost: (relates to production costs)
Carrying cost of other inventory:
2
Assume Annual production
2,000
lot size
Sky High manufactures drones for recreational use. Its most popular model is the Dash 500
switch production from one drone model to another. It costs $10 to carry one Dash 500 in in
1.
Compute the economic production lot size for the Dash 500.
2.
Given your answer to the first requirement, what is the total cost of setting up the product
3.
Assume that the company has been able to reduce setup costs for each production switc
the waste and inefficiency caused by inventories is also considered, the cost to carry one D
conditions, what is the economic production lot size for the Dash 500?
Setup costs
$200
Carrying costs
$20
Subtotal (under sqrt)
$40,000
Square root
$200
duced each time meaning inventory levels are constant)
now that the cost to carry one unit is $15. Recalculate the economic production
0 with 2,000 units produced each year. Setup costs are $400 to nventory for a year.
tion runs and carrying inventory for one year?
ch from one product to another to $200. Also assume that when Dash 500 in inventory jumps to $20 per unit. Under these
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
- Access to all documents
- Unlimited textbook solutions
- 24/7 expert homework help
Exercise 9A-2 Reorder Point and Safety Stock
Genome Limited manufactures parts for DNA testing kits. Details for one of the parts are sho
Economic order quantity
5,600 parts
Maximum weekly usage
600 parts
Lead time
3 weeks
Average weekly usage
520 parts
Management wants to know the proper safety stock to maintain for this component and the Required:
Lead time
3
Average weekly usage
520
Reorder point
Safety stock
Reorder point 1.
Assume that no safety stock is to be carried. What is the reorder point?
2.
Assume that a full safety stock is to be carried.
a.
What is the size of the safety stock in parts?
b.
What is the reorder point?
own below:
appropriate reorder point.
Exercise 9A-3 Economic Order Quantity
Required:
EOQ
EOQ
Carlson Limited uses 12,000 units of part CRF-2 each year. To improve control over its i
calculate the EOQ for this part.
1. The company has determined that the cost to place an order for the part is $15, and it
carry one part in inventory for one year is $1.00. Compute the EOQ for the part.
2. Assume that the cost to place an order decreases from $15 to $12 per order. Will the Calculate the new EOQ. (Round your answers to the nearest whole number.)
3. Assume that the cost to carry a part in inventory decreases from $1.00 to $0.80 per pa
unchanged at $15 per order.) What will be the effect on the EOQ? Show computations. nearest whole number.)
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
- Access to all documents
- Unlimited textbook solutions
- 24/7 expert homework help
inventories, the company wants to t has determined that the cost to EOQ increase or decrease? art. (Ordering costs remain (Round your answers to the