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Annual demand for steering wheels 30,500 Daily demand 100 Daily production (8 hours) 800 Desired lot size (2 hours of production) 200 Holding cost per unit per year $10

Annual demand for steering wheels 30,500 Daily demand 100 Daily production (8 hours) 800 Desired lot size (2 hours of production) 200 Holding cost per unit per year $10

Marketing
Marketing
20th Edition
ISBN:9780357033791
Author:Pride, William M
Publisher:Pride, William M
Chapter19: Pricing Concepts
Section: Chapter Questions
Problem 6DRQ
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Rick Wing has a repetitive manufacturing plant producing automobile steering wheels. Use the fo llowing data to prepare for a reduced lot size. The firm uses a work year of 305 days.           a) What is the setup cost, based on the desired lot size?
b) What is the setup time, based on $40 per hour setup labor?
Annual demand for steering wheels 30,500 Daily demand 100 Daily production (8 hours) 800 Desired lot size (2 hours of production) 200 Holding cost per unit per year $10
Transcribed Image Text:Annual demand for steering wheels 30,500 Daily demand 100 Daily production (8 hours) 800 Desired lot size (2 hours of production) 200 Holding cost per unit per year $10
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