An aircraft manufacturer uses 1,000,000 special rivets per year at a uniform rate. The rivets are made on a single-spindle automatic screw machine at the rate of 3,000 per hour. The manufacturing cost is $0.0052 per rivet and the storage cost is estimated to be $0.0008 per rivet per year. The set-up cost is $40 per set-up. Calculate the economic production quantity and the allow- able variation in this quantity for a maximum deviation from the minimum cost of 5%. Assume the machine operates 1,700 hours per year. Rederi

An aircraft manufacturer uses 1,000,000 special rivets per year at a uniform rate. The rivets are made on a single-spindle automatic screw machine at the rate of 3,000 per hour. The manufacturing cost is $0.0052 per rivet and the storage cost is estimated to be $0.0008 per rivet per year. The set-up cost is $40 per set-up. Calculate the economic production quantity and the allow- able variation in this quantity for a maximum deviation from the minimum cost of 5%. Assume the machine operates 1,700 hours per year. Rederi

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter7: Proudction Costs

Section: Chapter Questions

Problem 8SQP

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Question

Economic question need help with the second portionof the question

33. | An aircraft manufacturer uses 1,000,000 special rivets per year at a uniform
rate. The rivets are made on a single-spindle automatic screw machine at the
rate of 3,000 per hour. The manufacturing cost is $0.0052 per rivet and the
storage cost is estimated to be $0.0008 per rivet per year. The set-up cost is
$40 per set-up. Calculate the economic production quantity and the allow-
able variation in this quantity for a maximum deviation from the minimum
cost of 5%. Assume the machine operates 1,700 hours per year.
Rederive

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