A company can produce a part it uses in an assembly operation at the rate of 50 an hour. The companyoperates eight hours a day, 300 days a year. Daily usage of the part is 300 parts and the company uses thepart every operating day. The current batch size is 6,000 parts. The annual holding cost is $2 per unit, andsetup cost is $100. Q4.1. How many batches (production runs)will be produced in a year?Q4.2. While production is occurring, how many parts per day are being addedto inventory (Inventory is built up at what rate (units per day)?Q4.3. What average inventory being held?

Economic run quantity or Economic production quantity (EPQ) is the optimal quantity that a company…

Answered: A company can produce a part it uses in…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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A wallpaper company estimates the demand for a certain pattern to be 925 rolls per year. It costs $750 to set up the presses to print the pattern, plus $150 to print each roll. If the company can store a roll of wallpaper for a year at a cost of $4, how many rolls should it print at a time and how many printing runs on average will it need in a year to minimize production costs? (Assume the wallpaper sells steadily throughout the year, and the company reorders more whenever the stock runs out. Round the number of rolls per print to the nearest whole number and the average number of printing runs per year to two decimal places.) rolls per print rolls print runs per year runs
The Friendly Sausage Factory (FSF) can produce hot dogs at a rate of 5,000 per day. FSF supplies hot dogs to local restaurants at a steady rate of 270 per day. The cost to prepare the equipment for producing hot dogs is $66. Annual holding costs are 45 cents per hot dog. The factory operates 291 days a year. a. Find the optimal run size. (Do not round intermediate calculations. Round your answer to the nearest whole number.) > Answer is complete but not entirely correct. Optimal run size 4,670
A toy manufacturer uses 45,980 rubber wheels per year for its popular dump truck series. The firm makes its own wheels, which it can produce at a rate of 900 per day. The toy trucks are assembled uniformly over the entire year. Carrying cost is per wheel per year. Setup cost for a production run is. The firm operates 242 days per year. Determine the following: a. Optimal run size (Round your answer to a whole number, following normal rules of rounding.) b. Use your final answer from part a to determine minimum total annual cost for carrying and setup. (Round your answer to a whole number.) c. Cycle time for the optimal run size (Round your answer to two decimal points.)
DETERMINING THE NUMBER OF KANBAN CONTAINERS Hobbs Bakery produces short runs of cakes that are shipped to grocery stores. The owner, Ken Hobbs,wants to try to reduce inventory by changing to a kanban system. He has developed the following dataand asked you to finish the project.Production lead time = Wait time + Material handling time + Processing time = 2 daysDaily demand = 500 cakesSafety stock = 12 dayContainer size (determined on a production order size EOQ basis) = 250 cakes
Abey Kuruvilla, of Parkside Plumbing, uses 1,350 of a certain spare part that costs $24 for each order, with an annual holding cost of $25. Part 2 a) Calculate the total cost for order sizes of 25, 40, 50, 60, and 100 (round your responses to two decimal places). Order Size Total Cost ($) 25 enter your response here 40 enter your response here 50 enter your response here 60 enter your response here 100 enter your response here b) What is the economic order quantity?units (round your response to two decimal places).
Gingerbread Man Inc. produces short runs of cakes with a daily demand of 500 cakes that are shipped to grocery stores. The owner, Mr. Pillsbury Doughboy, wants to try to reduce inventory by changing to a Kanban system and decides to use 5 kanbans. He informs you that his safety stock needs to be 0.5 days and that he requires a production lead time of 3 days. What should be the container capacity in this system?
The demand for a particular part called SKU 005 is 1,500 units a year. The cost of one SKU 005 is $64.00. It costs $60.00 to place an order SKU 005, and the user of SKU 005 has a per year inventory carrying cost of 25% of unit cost. Assume that there are 250 working days in the year where SKU 005 is used. What is the combined annual holding and ordering cost of an order size of 200 units for SKU 005? OA. $2050 O B. $1360 O C. $1697 O D. $825 O E. $1200
A demand driven model will likely lead to higher inventory levels due to safety stock. True False
The Northridge Company tends to keep the inventory low. At the same time, it is important to respond to demand quickly, since a customer who wants a product K is very likely to get one from a competitor if Northridge Company doesn’t have one available immediately. Northridge Company’s current policy to produce the product K is to produce 100 per week, which is the average demand. Even this is a problem, as the production manager has pointed out, since the equipment is also used for other products and the lot size of 300 would be much more efficient. He said he is currently set up the production for product K for the next week and states that he has capacity available to produce 300 at a time next week. The following lists the forecasts and actual customer orders for the next 12 weeks. Week 1 2 3 4 5 6 7 8 9 10 11 12 Forecast 90 120 110 80 85 95 100 110 90 90 100 110 Customer Orders 105 97 93 72 98 72 53 21…
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A company orders 100 units of a raw material every time its inventory level drops to 50 units. The lead time for the delivery of the raw material is 5 days. Currently, the inventory level is at 80 units. Assuming constant demand, calculate the reorder point for the raw material.

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