Acme stamping produces seat brackets for a major manufacturer of stadium seating. They sell an average of 57,000 brackets per year. Their stamping machine operates for 8 hours per day, 250 days per year and can produce 150 brackets per hour. It costs them $370 to set up the stamping machine for a production run. The brackets cost $0.47 each to make, and Acme uses 20% of the unit cost to estimate the annual inventory holding cost. Calculate the economic production quantity for seat brackets.

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Asked Jan 15, 2020
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Acme stamping produces seat brackets for a major manufacturer of stadium seating. They sell an average of 57,000 brackets per year. Their stamping machine operates for 8 hours per day, 250 days per year and can produce 150 brackets per hour. It costs them $370 to set up the stamping machine for a production run. The brackets cost $0.47 each to make, and Acme uses 20% of the unit cost to estimate the annual inventory holding cost. Calculate the economic production quantity for seat brackets.

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Expert Answer

Step 1

given

D = 57000

P = 150 units/hr X 8 hr

 = 1200 units/day

S = 370/set up

Step 2
Step 3

set up the stamping machibe

C...

Operations Management homework question answer, step 3, image 1
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