HAL Ltd. produces a line of high-capacity disk drives for computers. The housings for the drives are produced in Hamilton, Ontario at a rate of 150 housings per month, and shipped to the main plant in Tore The housings cost HAL $85 each to produce, and the setup cost for beginning a production run is $700. F uses the drive housings at a fairly steady rate of 720 per year. Assume an annual interest rate of 28% for determining the holding cost. a. What is the optimal number of housings for HAL to produce in each production run? b. For the optimal production size, what proportion of each production cycle consists of uptime and wh: proportion consists of downtime? c. Assuming that HAL produces the optimal number of housings in each production run, what is the maximum on-hand inventory level of these housings? What is the annual cost of holding and setup?

HAL Ltd. produces a line of high-capacity disk drives for computers. The housings for the drives are produced in Hamilton, Ontario at a rate of 150 housings per month, and shipped to the main plant in Tore The housings cost HAL $85 each to produce, and the setup cost for beginning a production run is $700. F uses the drive housings at a fairly steady rate of 720 per year. Assume an annual interest rate of 28% for determining the holding cost. a. What is the optimal number of housings for HAL to produce in each production run? b. For the optimal production size, what proportion of each production cycle consists of uptime and wh: proportion consists of downtime? c. Assuming that HAL produces the optimal number of housings in each production run, what is the maximum on-hand inventory level of these housings? What is the annual cost of holding and setup?

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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