Arthur Meiners is the production manager of Wheel-Rite, a small producer of metal parts. Wheel-Rite supplies Cal-Tex, a larger assembly company, with 11,200 wheel bearings each year. This order has been stable for some time. Setup cost for Wheel-Rite is $39, and holding cost is $0.50 per wheel bearing per year. Wheel-Rite can produce 510 wheel bearings per day. Cal-Tex is a just-in-time manufacturer and requires that 51 bearings be shipped to it each business day. a) What is the optimum production quantity? 1393 units (round your response to the nearest whole number). b) What is the maximum number of wheel bearings that will be in inventory at Wheel-Rite? units (round your response to the nearest whole number).
Arthur Meiners is the production manager of Wheel-Rite, a small producer of metal parts. Wheel-Rite supplies Cal-Tex, a larger assembly company, with 11,200 wheel bearings each year. This order has been stable for some time. Setup cost for Wheel-Rite is $39, and holding cost is $0.50 per wheel bearing per year. Wheel-Rite can produce 510 wheel bearings per day. Cal-Tex is a just-in-time manufacturer and requires that 51 bearings be shipped to it each business day. a) What is the optimum production quantity? 1393 units (round your response to the nearest whole number). b) What is the maximum number of wheel bearings that will be in inventory at Wheel-Rite? units (round your response to the nearest whole number).
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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Transcribed Image Text:Arthur Meiners is the production manager of Wheel-Rite, a small producer
of metal parts. Wheel-Rite supplies Cal-Tex, a larger assembly company,
with 11,200 wheel bearings each year. This order has been stable for
some time. Setup cost for Wheel-Rite is $39, and holding cost is $0.50 per
wheel bearing per year. Wheel-Rite can produce 510 wheel bearings per
day. Cal-Tex is a just-in-time manufacturer and requires that 51 bearings
be shipped to it each business day.
a) What is the optimum production quantity? 1393 units (round your
response to the nearest whole number).
b) What is the maximum number of wheel bearings that will be in
inventory at Wheel-Rite? units (round your response to the nearest
whole number).
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