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What is the economic production quantity? If the economic production quantity is used, then calculate: • cycle time, • number of production runs in a year, • length of a production run in a cycle, • length of down time, • maximum level of on-hand inventory, and • average inventory per cycle.

What is the economic production quantity? If the economic production quantity is used, then calculate: • cycle time, • number of production runs in a year, • length of a production run in a cycle, • length of down time, • maximum level of on-hand inventory, and • average inventory per cycle.

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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2. Suppose that FCC Company manufactures and sells a product having a demand rate of 30,000 units per year. The manufacturing rate is 40,000 units in one year. The setup cost is $100 for each manufacturing run. The manufacturing cost (independent from the setup cost) is $30 per unit, and the annual inventory holding cost per unit is 20% of the unit manufacturing cost. Stockouts are not allowed. (a) What is the economic production quantity? (b) If the economic production quantity is used, then calculate: • cycle time, number of production runs in a year, length of a production run in a cycle, • length of down time, maximum level of on-hand inventory, and average inventory per cycle.
Transcribed Image Text:2. Suppose that FCC Company manufactures and sells a product having a demand rate of 30,000 units per year. The manufacturing rate is 40,000 units in one year. The setup cost is $100 for each manufacturing run. The manufacturing cost (independent from the setup cost) is $30 per unit, and the annual inventory holding cost per unit is 20% of the unit manufacturing cost. Stockouts are not allowed. (a) What is the economic production quantity? (b) If the economic production quantity is used, then calculate: • cycle time, number of production runs in a year, length of a production run in a cycle, • length of down time, maximum level of on-hand inventory, and average inventory per cycle.
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