HAL Ltd. produces a line of high-capacity disk drives for computers. The housings for the drives are produced in Hamilton, Ontario at a rate of 150 housings per month, and shipped to the main plant in Tore The housings cost HAL $85 each to produce, and the setup cost for beginning a production run is $700. F uses the drive housings at a fairly steady rate of 720 per year. Assume an annual interest rate of 28% for determining the holding cost. a. What is the optimal number of housings for HAL to produce in each production run? b. For the optimal production size, what proportion of each production cycle consists of uptime and wh: proportion consists of downtime? c. Assuming that HAL produces the optimal number of housings in each production run, what is the maximum on-hand inventory level of these housings? What is the annual cost of holding and setup?

HAL Ltd. produces a line of high-capacity disk drives for computers. The housings for the drives are produced in Hamilton, Ontario at a rate of 150 housings per month, and shipped to the main plant in Tore The housings cost HAL $85 each to produce, and the setup cost for beginning a production run is $700. F uses the drive housings at a fairly steady rate of 720 per year. Assume an annual interest rate of 28% for determining the holding cost. a. What is the optimal number of housings for HAL to produce in each production run? b. For the optimal production size, what proportion of each production cycle consists of uptime and wh: proportion consists of downtime? c. Assuming that HAL produces the optimal number of housings in each production run, what is the maximum on-hand inventory level of these housings? What is the annual cost of holding and setup?

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...

See similar textbooks

Similar questions

The time-phased net requirements for the base assembly in a table lamp over thenext six weeks areWeek 1 2 3 4 5 6Requirements 335 200 140 440 300 200The setup cost for the construction of the base assembly is $200, and the holding cost is $0.30 per assembly per week.a. What lot sizing do you obtain from the EOQ formula?
Suppose that the EOQ is 100, average annual demand is1,000 units, and the lead time demand is a random variablehaving the distribution shown in Table 15.a What value of SLM1 corresponds to a reorder pointof 25?b If we wanted to attain a 95% value of SLM1, whatreorder point should we choose?c If we wanted an average of at most two stockouts peryear, what reorder point should we choose? Lead TimeDemand Probability10 16 15 14 20 14 25 112 30 14
1 A company carries 10 items in stock, each with an economic order quantity of$20,000. Through a program of component standardization, the 10 items are reducedto 5. The total annual demand is the same, but the annual demand for each item istwice what it was before. In Chapter 10, we learned that the economic order quantityvaries as the square root of the annual demand. Since the annual demand for eachitem is now doubled, calculate:a. The new EOQ.b. The total average inventory before standardization.c. The total average inventory after standardization.
please solve D,E and F (a) What is the expected jet fuel yearly average demand D? =4160 tons(b) Given D, find the order lot size Q that gives the economic order quantity (EOQ). =60.39 unit(c) Given the EOQ, what is the total inventory holding cost?= $1067695.2(d) Given the EOQ, what is the total inventory ordering cost?(e) Given the EOQ, what is the total annual inventory cost?(f) What is the time between orders in weeks?
In a certain firm, the demand for their product is given as 360. The holding cost was estimated to be K0.80 while the ordering cost was K100 per order. In this firm, there are 250 working days in a year.Required; a. What is the EOQ? b. How many orders should be processed per year? c. What is the expected cycle time?d. What will be the total cost for the inventory? ACB firm produces type C fire extinguishers. They make 30 000 of these fire extinguishers per year. Each extinguisher requires one handle (assume a 300 day work year for daily usage rate purposes) the annual carrying cost is K15 per handle. The production setup cost is set at K1500 and a daily production rate of 300.Required;a) What is the optimal production order quantity? b) Determine the following;i. Imaxii. Average inventoryiii. Number of butches per yeariv. Cycle timev. Run time
7. Nestle Ltd. It produces its premium plant food in 50 Kg bags. Demand is 100,000 Kgs. per week and the plant operates 52 weeks each year. Nestle can produce 250,000 Kgs. per week. The setup cost is OMR 200 and the annua holding cost rate is OMR 0.30 per bag. What is the optimal total cycle time including the production time in year? a. 0.146 b. 0.108 c. 0.137 d. 0.208 e. 0.127 f. None is correct
Basic EOQ. This type of problem can be recognized when annual demand (D), ordering cost (S), andholding or carrying cost per unit (H) are given. Use Formula 13–2 for order quantity, Formula 13–1for total cost, and D/Q for number of orders a year.A toy manufacturer uses approximately 32,000 silicon chips annually. The chips are used at asteady rate during the 240 days a year that the plant operates. Annual holding cost is $3 per chip, andordering cost is $120. Determine the following:a. The optimal order quantityb. The number of workdays in an order cycle
Henrique Correa’s bakery prepares all its cakesbetween 4 a.m. and 6 a.m. so they will be fresh when customers arrive. Day-old cakes are virtually always sold, but at a 50% dis-count off the regular $10 price. The cost of baking a cake is $6, and demand is estimated to be normally distributed, with a mean of 25and a standard deviation of 4. What is the optimal stocking level?
The time-phased net requirements for the base assembly in a table lamp over thenext six weeks areWeek 1 2 3 4 5 6Requirements 335 200 140 440 300 200The setup cost for the construction of the base assembly is $200, and the holding cost is $0.30 per assembly per week.b. Determine the lot sizes using the Silver–Meal heuristic.
Ground Coffee shop uses 3 kgs of a specialty tea weekly; each kg. costs 16 MU.Carrying costs are 2 MU/kg/week because space is very scarce. It costs the firm 7 MU toprepare an order. Assume the basic EOQ model with no shortages applies. Assume 52weeks/year.a) How many kgs should Ground to order at a time?b) What is total annual inventory cost?c) How many orders should ground place annually?d) How many days will there be between orders(assume 310 operating days)? Please mention formulas and do it in detail so I can understand.
The time-phased net requirements for the base assembly in a table lamp over thenext six weeks areWeek 1 2 3 4 5 6Requirements 335 200 140 440 300 200The setup cost for the construction of the base assembly is $200, and the holding cost is $0.30 per assembly per week.c. Determine the lot sizes using the least unit cost heuristic
1. A firm’s annual usage of flour is 20,000 kilograms. The carrying cost is P5.00 per kilogram while the ordering cost is P100 every time an order is placed; delivery lead time is 2 weeks. If the firm’s safety stock requirement is 100 kilograms, compute for the following (assume that there are 50 working weeks in a year) a. EOQ in units b. Total carrying cost at EOQ c. Total ordering cost at EOQ d. Re-order point Pls provide solutions