The optimum production quantity. Introduction: Economic production quantity (EPQ): The economic production quantity is used to determine the amount a company or a retail outlet should purchase at every order so as to minimize the associated total inventory costs. It is done by balancing the holding cost and the ordering cost.

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Answer 1

Question

Chapter 12, Problem 20P

a)

Summary Introduction

To calculate: The optimum production quantity.

Introduction:

Economic production quantity (EPQ):

The economic production quantity is used to determine the amount a company or a retail outlet should purchase at every order so as to minimize the associated total inventory costs. It is done by balancing the holding cost and the ordering cost.

b)

Summary Introduction

To calculate: The maximum inventory level.

c)

Summary Introduction

To calculate: The number of production runs of wheel bearing in a year.

d)

Summary Introduction

To calculate: The total of the setup cost and holding cost.

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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 9,500-wheel bearings each year. This order has been stable for some time. Setup cost for Wheel-Rite is $39, and holding cost is $0.40 per wheel bearing per year. Wheel-Rite can produce 550-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? _______ units 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 plus holding cost for Wheel-Rite?

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 9,600 wheel bearings each year. This order has been stable for some time. Setup cost for Wheel-Rite is $41, and holding cost is $0.70 per wheel bearing per year. Wheel-Rite can produce 490 wheel bearings per day. Cal-Tex is a just-in-time manufacturer and requires that 52 bearings be shipped to it each business day. a) What is the optimum production quantity? 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 11,300wheel bearings each year. This order has been stable for some time. Setup cost forWheel-Rite is $41, and holding cost is $0.60 per wheel bearing per year. Wheel-Rite can produce 490 wheel bearings per day. Cal Tex is a just-in-time manufacturer and requires that 52 bearings be shipped to it each business day. a) What is the optimum production quantity? 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). c) How many production runs of wheel bearings will Wheel-Rite have in a year? runs (round your response to two decimal places). d) What is the total setup plus holding cost for Wheel-Rite? $ (round your response to two decimal places).

Answer 2

Question

Chapter 12, Problem 20P

a)

Summary Introduction

To calculate: The optimum production quantity.

Introduction:

Economic production quantity (EPQ):

The economic production quantity is used to determine the amount a company or a retail outlet should purchase at every order so as to minimize the associated total inventory costs. It is done by balancing the holding cost and the ordering cost.

b)

Summary Introduction

To calculate: The maximum inventory level.

c)

Summary Introduction

To calculate: The number of production runs of wheel bearing in a year.

d)

Summary Introduction

To calculate: The total of the setup cost and holding cost.

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Answer 3

Question

Chapter 12, Problem 20P

a)

Summary Introduction

To calculate: The optimum production quantity.

Introduction:

Economic production quantity (EPQ):

The economic production quantity is used to determine the amount a company or a retail outlet should purchase at every order so as to minimize the associated total inventory costs. It is done by balancing the holding cost and the ordering cost.

b)

Summary Introduction

To calculate: The maximum inventory level.

c)

Summary Introduction

To calculate: The number of production runs of wheel bearing in a year.

d)

Summary Introduction

To calculate: The total of the setup cost and holding cost.

Expert Solution & Answer

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Answer 4

Question

Chapter 12, Problem 20P

a)

Summary Introduction

To calculate: The optimum production quantity.

Introduction:

Economic production quantity (EPQ):

The economic production quantity is used to determine the amount a company or a retail outlet should purchase at every order so as to minimize the associated total inventory costs. It is done by balancing the holding cost and the ordering cost.

b)

Summary Introduction

To calculate: The maximum inventory level.

c)

Summary Introduction

To calculate: The number of production runs of wheel bearing in a year.

d)

Summary Introduction

To calculate: The total of the setup cost and holding cost.

Expert Solution & Answer

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Check out a sample textbook solution

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Answer 5

Chapter 12, Problem 20P

a)

Summary Introduction

To calculate: The optimum production quantity.

Introduction:

Economic production quantity (EPQ):

The economic production quantity is used to determine the amount a company or a retail outlet should purchase at every order so as to minimize the associated total inventory costs. It is done by balancing the holding cost and the ordering cost.

b)

Summary Introduction

To calculate: The maximum inventory level.

c)

Summary Introduction

To calculate: The number of production runs of wheel bearing in a year.

d)

Summary Introduction

To calculate: The total of the setup cost and holding cost.

Answer 6

Chapter 12, Problem 20P

a)

Summary Introduction

To calculate: The optimum production quantity.

Introduction:

Economic production quantity (EPQ):

The economic production quantity is used to determine the amount a company or a retail outlet should purchase at every order so as to minimize the associated total inventory costs. It is done by balancing the holding cost and the ordering cost.

Answer 7

Chapter 12, Problem 20P

a)

Summary Introduction

To calculate: The optimum production quantity.

Introduction:

Economic production quantity (EPQ):

The economic production quantity is used to determine the amount a company or a retail outlet should purchase at every order so as to minimize the associated total inventory costs. It is done by balancing the holding cost and the ordering cost.

Answer 8

b)

Summary Introduction

To calculate: The maximum inventory level.

Answer 9

b)

Summary Introduction

To calculate: The maximum inventory level.

Answer 10

c)

Summary Introduction

To calculate: The number of production runs of wheel bearing in a year.

Answer 11

c)

Summary Introduction

To calculate: The number of production runs of wheel bearing in a year.

Answer 12

d)

Summary Introduction

To calculate: The total of the setup cost and holding cost.

Answer 13

d)

Summary Introduction

To calculate: The total of the setup cost and holding cost.

Answer 14

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Answer 15

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Answer 16

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Answer 17

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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 so as to minimize the associated total inventory costs.

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To calculate: The maximum inventory level.

To calculate: The number of production runs of wheel bearing in a year.

To calculate: The total of the setup cost and holding cost.

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