A) Calculate the EOQ assuming instantaneous receipt. B) Calculate the EOQ assuming non-instantaneous receipt.

Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter6: Optimization Models With Integer Variables
Section6.4: Fixed-cost Models
Problem 13P
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A manufacturer produces bicycles. Special screws are produced within the plant. Four
special screws are necessary for each bicycle.
A total of 1200 bicycles are made each year; the total set-up cost for machinery is $15,
while the storage cost is 10% and the cost of a screw is $0.30.
There are 240 working days per year, and 960 screws per day can be made (2 screws per
minute X 60 minutes X 8 hours).
A) Calculate the EOQ assuming instantaneous receipt.
B) Calculate the EOQ assuming non-instantaneous receipt.
Transcribed Image Text:A manufacturer produces bicycles. Special screws are produced within the plant. Four special screws are necessary for each bicycle. A total of 1200 bicycles are made each year; the total set-up cost for machinery is $15, while the storage cost is 10% and the cost of a screw is $0.30. There are 240 working days per year, and 960 screws per day can be made (2 screws per minute X 60 minutes X 8 hours). A) Calculate the EOQ assuming instantaneous receipt. B) Calculate the EOQ assuming non-instantaneous receipt.
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