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Carol Cagle has a repetitive manufacturing plant producing trailer hitches in Arlington, Texas. The plant has an average inventory turnover of only 12 times per year. He has therefore determined that he will reduce his component lot sizes. He has developed the following data for one component, the safety chain clip: Setup labor cost Annual holding cost Daily production Annual demand Desired lot size $20 per hour $15 per unit 960 units/8 hour day 39,600 (275 days each daily demand of 144 units) 120 units (one hour of production) To obtain the desired lot size, the set-up time that should be achieved = 2.32 minutes (round your response to two decimal places).

Carol Cagle has a repetitive manufacturing plant producing trailer hitches in Arlington, Texas. The plant has an average inventory turnover of only 12 times per year. He has therefore determined that he will reduce his component lot sizes. He has developed the following data for one component, the safety chain clip: Setup labor cost Annual holding cost Daily production Annual demand Desired lot size $20 per hour $15 per unit 960 units/8 hour day 39,600 (275 days each daily demand of 144 units) 120 units (one hour of production) To obtain the desired lot size, the set-up time that should be achieved = 2.32 minutes (round your response to two decimal places).

Contemporary Marketing
Contemporary Marketing
18th Edition
ISBN:9780357033777
Author:Louis E. Boone, David L. Kurtz
Publisher:Louis E. Boone, David L. Kurtz
Chapter15: Distribution Channels And Supply Chain Management
Section15.4: Components Of The Supply Chain
Problem 1LO
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Carol Cagle has a repetitive manufacturing plant producing trailer hitches in Arlington, Texas. The plant has an average inventory turnover of only 12 times per year. He has therefore determined that he will reduce his component lot sizes. He has developed the following data for one component, the safety chain clip: Setup labor cost Annual holding cost Daily production Annual demand Desired lot size $20 per hour $15 per unit 960 units/8 hour day 39,600 (275 days each daily demand of 144 units) 120 units (one hour of production) To obtain the desired lot size, the set-up time that should be achieved = 2.32 minutes (round your response to two decimal places).
Transcribed Image Text:Carol Cagle has a repetitive manufacturing plant producing trailer hitches in Arlington, Texas. The plant has an average inventory turnover of only 12 times per year. He has therefore determined that he will reduce his component lot sizes. He has developed the following data for one component, the safety chain clip: Setup labor cost Annual holding cost Daily production Annual demand Desired lot size $20 per hour $15 per unit 960 units/8 hour day 39,600 (275 days each daily demand of 144 units) 120 units (one hour of production) To obtain the desired lot size, the set-up time that should be achieved = 2.32 minutes (round your response to two decimal places).
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