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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

Practical Management Science
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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Question

Rick Wing has a repetitive manufacturing plant
producing automobile steering wheels. Use the following 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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