A certain piece of production equipment is used to produce various components for an assembled product of the XYZ Company. To keep in-process inventories low, it is desired to produce the components in batch sizes of 150 units (daily requirements for assembly). Demand for each product is 2500 units per year. Production downtime costs an estimated $200/hr. All of the components made on the equipment are of approximately equal value: Cp = $9.00/unit. Holding cost rate = 30%/yr. In how many minutes must the changeover (setup) between batches be completed in order for 100 units to be the economic order quantity?
A certain piece of production equipment is used to produce various components for an assembled product of the XYZ Company. To keep in-process inventories low, it is desired to produce the components in batch sizes of 150 units (daily requirements for assembly). Demand for each product is 2500 units per year. Production downtime costs an estimated $200/hr. All of the components made on the equipment are of approximately equal value: Cp = $9.00/unit. Holding cost rate = 30%/yr. In how many minutes must the changeover (setup) between batches be completed in order for 100 units to be the economic order quantity?
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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A certain piece of production equipment is used to produce various components for an assembled product of the XYZ Company. To keep in-process inventories low, it is desired to produce the components in batch sizes of 150 units (daily requirements for assembly). Demand for each product is 2500 units per year. Production downtime costs an estimated $200/hr. All of the components made on the equipment are of approximately equal value: Cp = $9.00/unit. Holding cost rate = 30%/yr. In how many minutes must the changeover (setup) between batches be completed in order for 100 units to be the economic order quantity?
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