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 |
$25 per hour |
Annual holding cost |
$14 per unit per unit |
Daily production |
992 units/8 hour day |
Annual demand |
25300 (275 days each ×daily demand of 92 units) |
Desired lot size |
124 units (one hour of production) |
To obtain the desired lot size, the set-up time that should be achieved =
nothing
minutes (round your response to two decimal places).
Let set up cost = S
Annual demand = D = 25300
Daily demand = d = 92
Daily production = p = 992
Annual unit holding cost = I = $14
Let set up cost = $ S
Desired lot size ( Economic production quantity) = 124 units
Therefore,
124 = Square root ( 2 x D X S/I x p/(p-d)
Or, 124 = Square root ( 2 x 25300 x S/ 14 x 992 / (992 – 92))
Or, 124 = Square root ( 2 x 25300 x s/14 x 992/900)
Or, 15376 =3983.75.S
Or, S = $3.859
Set up labour cost = $25 / hour= $25/60 per minute
Set up labour cost x Set up time = Set up cost
Or, 25/60 x Set up time = $3.859
Set up time ( minutes) = 3.859 x 60/25 = 9.26 minutes
Set up time that should be achieved = 9.26 minutes |
Carol Cagle has a repetitive manufacturing plant producing trailer hitches in Arlington, Texas. The plant has...
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 $30 per hour $14 per unit 1,008 units/8 hour day 43,680 (260 days each x daily...
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 $12 per unit 976 units/8 hour day 25,300 (275 days each x daily...
Problem 16.1 : Question Help 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 $30 per hour Annual holding cost $14 per unit Daily production 960 units/8 hour day Annual demand 33,000 (275 days each...
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