Pearson eText Principles of Operations Management: Sustainability and Supply Chain Management -- Instant Access (Pearson+)
Pearson eText Principles of Operations Management: Sustainability and Supply Chain Management -- Instant Access (Pearson+)
11th Edition
ISBN: 9780135639221
Author: Jay Heizer, Barry Render
Publisher: PEARSON+
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Chapter 16, Problem 1P
Summary Introduction

To determine: The setup time.

Introduction:

Economic order quantity is said to be the units that are added to the inventory to minimize the inventory cost. Inventory costs include holding cost, order cost, and shortage cost.

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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 $25 per hour $12 per unit 992 units/8 hour day 24,840 (270 days each x daily demand of 92 units) 124 units (one hour of production) To obtain the desired lot size, the set-up time that should be achieved = 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 $30 per hour $13 per unit 960 units/8 hour day 36,000 (250 days each x daily demand of 144 units) Daily production Annual demand Desired lot size 120 units (one hour of production) To obtain the desired lot size, the set-up time that should be achieved = ☐ minutes (round your response to two decimal places).
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