Arthur Meiners is the production manager of WheelRite,a small producer of metal parts. Wheel-Rite supplies CaiTex,a larger assembly company, with 10,000 wheel bearings eachyear. This order has been stable for some time. Setup cost forWheel-Rite is $40, and holding cost is $.60 per wheel bearing peryear. Wheel-Rite can produce 500 wheel bearings per day. CalTexis a just-in-time manufacturer and requires that 50 bearingsbe shipped to it each business day.a) What is the optimum production quantity?b) What is the maximum number of wheel bearings that will be in inventory at Wheel-Rite?c) How many production runs of wheel bearings will Wheel-Rite have in a year?d) What is the total setup + holding cost for Wheel-Rite?
Arthur Meiners is the production manager of WheelRite,a small producer of metal parts. Wheel-Rite supplies CaiTex,a larger assembly company, with 10,000 wheel bearings eachyear. This order has been stable for some time. Setup cost forWheel-Rite is $40, and holding cost is $.60 per wheel bearing peryear. Wheel-Rite can produce 500 wheel bearings per day. CalTexis a just-in-time manufacturer and requires that 50 bearingsbe shipped to it each business day.a) What is the optimum production quantity?b) What is the maximum number of wheel bearings that will be in inventory at Wheel-Rite?c) How many production runs of wheel bearings will Wheel-Rite have in a year?d) What is the total setup + holding cost for Wheel-Rite?
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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| Arthur Meiners is the a small producer of metal parts. Wheel-Rite supplies CaiTex, a larger assembly company, with 10,000 wheel bearings each year. This order has been stable for some time. Setup cost for Wheel-Rite is $40, and holding cost is $.60 per wheel bearing per year. Wheel-Rite can produce 500 wheel bearings per day. CalTex is a just-in-time manufacturer and requires that 50 bearings be shipped to it each business day. a) What is the optimum production quantity? b) What is the maximum number of wheel bearings that will be in inventory at Wheel-Rite? c) How many production runs of wheel bearings will Wheel-Rite have in a year? d) What is the total setup + holding cost for Wheel-Rite? |
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