11th Edition

ISBN: 9780132921145

Author: Jay Heizer

Publisher: PEARSON

Concept explainers

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Textbook Question

Chapter 12, Problem 18P

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 10,000 wheel bearings each year. This order has been stable for some time. Setup cost for Wheel-Rite is $40, and holding cost is $.60 per wheel bearing per year. Wheel-Rite can produce 500 wheel bearings per day. Cal-Tex is a just-in-time manufacturer and requires that 50 bearings be shipped to it each business day.

a. What is the optimum production quantity?
b. What is the maximum number of wheel bearings that will be in inventory at Wheel-Rite?
c. How many production runs of wheel bearings will Wheel-Rite have in a year?
d. What is the total setup + holding cost for Wheel-Rite?

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Chapter 12, Problem 17P

Chapter 12, Problem 19P

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Chapter 12 Solutions

Operations Management

Ch. 12 - Question 1. Describe the four types of inventory.Ch. 12 - Question 2. With the advent of low-cost...Ch. 12 - Question 3. What is the purpose of the ABC...Ch. 12 - Question 4. Identify and explain the types of...Ch. 12 - Question 5. Explain the major assumptions of the...Ch. 12 - Question 6. What is the relationship of the...Ch. 12 - Question 7. Explain why it is not necessary to...Ch. 12 - Question 8. What are the advantages of cycle...Ch. 12 - What impact does a decrease in setup time have on...Ch. 12 - When quantity discounts are offered, why is it not...

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Solution Summary: The author explains the economic production quantity, which determines the amount a company or retail outlet should purchase at every order to minimize the associated inventory costs.

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