Question

I Think I have the first part down. I just need help on the last four questions with the 12 day cycle. Thank you!

A company is about to begin production of a new product. The manager of the department wants to know how often the machine used to produce the current item will be available for the production of the new product. The machine produces the current item at a rate of 170 units a day. 80 units will be used daily in assembling the final product. Assembly takes place five days a week, 50 weeks a year. The manager estimates that it will take almost a full day to get the machine ready for a production run, at a set-up cost of $280. Inventory unit holding cost will be $10 a year You are asked to provide the following computation results for the current product: What run quantity should be used to minimize total annual costs? 1999 What is the length of run time in days? 11.76 What is the length of cycle time in days? 24.99 During the production, at what rate will inventory buildup? 90 What is the maximum level inventory can reach? 1058 What is the total annual cost? $ 8092.89 Suppose to run the new product that needs a minimum of 12 days per cycle between runs of current item Can new product be produced with current setting? (YES or NO) What would the run size of the current product be needed to just accommodate the new job? What is the total annual cost in this case? S What is the increase in total cost? S FORMAT FOR ENTRIES .Quantities (run sizes) and inventory buildup rates are INTEGER (no decimals) Inventory Levels and Times are in two decimals after the dot. (7.20, for example) .Costs are in two decimals after the dot. (3750.20, for example. DO NOT ENTER S sign)

Answer 1

Economic Production Quantity refers to the number of unit the company should add to the inventory and the production is made to minimize the total inventory cost. It maintain a balance between setup costs and carrying costs.

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