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a. What is the setup cost, based on the desired lot size? b. What is the setup time, based on $40 per hour setup labor? c. The plant manager is informed that the set up time for the desired lot will take 5.0 minutes. Can he use the lot size, Q=63? Show calculation of your answer. Hints calculate set up cost for per set up(set time 5 minutes) and then calculate EOQ using the calculated set up per set up.

a. What is the setup cost, based on the desired lot size? b. What is the setup time, based on $40 per hour setup labor? c. The plant manager is informed that the set up time for the desired lot will take 5.0 minutes. Can he use the lot size, Q=63? Show calculation of your answer. Hints calculate set up cost for per set up(set time 5 minutes) and then calculate EOQ using the calculated set up per set up.

Practical Management Science
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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QUESTION 1 (LEAN OPERATIONS AND JUST-IN-TIME(JIT) - DETERMINING OPTIMAL SET UP TIME) A product has annual demand of 22,000 units. The plant manager wants production to follow a two-hour cycle. Based on the following data, what setup cost will enable the desired production cycle? Daily demand, d=88 per day (250 days per year), daily production, p=250 units per day, H=$50 per unit per year, and desired lot size, Q-63 (demand for two hours). a. What is the setup cost, based on the desired lot size? b. What is the setup time, based on $40 per hour setup labor? c. The plant manager is informed that the set up time for the desired lot will take 5.0 minutes. Can he use the lot size, Q=63? Show calculation of your answer. Hints calculate set up cost for per set up(set time 5 minutes) and then calculate EOQ using the calculated set up per set up.
Transcribed Image Text:QUESTION 1 (LEAN OPERATIONS AND JUST-IN-TIME(JIT) - DETERMINING OPTIMAL SET UP TIME) A product has annual demand of 22,000 units. The plant manager wants production to follow a two-hour cycle. Based on the following data, what setup cost will enable the desired production cycle? Daily demand, d=88 per day (250 days per year), daily production, p=250 units per day, H=$50 per unit per year, and desired lot size, Q-63 (demand for two hours). a. What is the setup cost, based on the desired lot size? b. What is the setup time, based on $40 per hour setup labor? c. The plant manager is informed that the set up time for the desired lot will take 5.0 minutes. Can he use the lot size, Q=63? Show calculation of your answer. Hints calculate set up cost for per set up(set time 5 minutes) and then calculate EOQ using the calculated set up per set up.
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