Race One Motors is an Indonesian car manufacturer. At its largest manufacturing facility, in Jakarta, the company produces subcomponents at a rate of 290 per day, and it uses these subcomponents at a rate of 12,700 per year (of 250 working days). Holding costs are $2 per item per year, and ordering costs are $31 per order. a) What is the economic production quantity? 690.88 units (round your response to two decimal places). b) How many production runs per year will be made? 18.38 production runs (round your response to two decimal places). c) What will be the maximum inventory level? 569.86 units (round your response to two decimal places). d) What percentage of time will the facility be producing components? 17.50 % (enter your response as a percentage rounded to two decimal places). e) What is the annual cost of ordering and holding inventory? $ (round your response to two decimal places).
Race One Motors is an Indonesian car manufacturer. At its largest manufacturing facility, in Jakarta, the company produces subcomponents at a rate of 290 per day, and it uses these subcomponents at a rate of 12,700 per year (of 250 working days). Holding costs are $2 per item per year, and ordering costs are $31 per order. a) What is the economic production quantity? 690.88 units (round your response to two decimal places). b) How many production runs per year will be made? 18.38 production runs (round your response to two decimal places). c) What will be the maximum inventory level? 569.86 units (round your response to two decimal places). d) What percentage of time will the facility be producing components? 17.50 % (enter your response as a percentage rounded to two decimal places). e) What is the annual cost of ordering and holding inventory? $ (round your response to two decimal places).
Purchasing and Supply Chain Management
6th Edition
ISBN:9781285869681
Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Chapter16: Lean Supply Chain Management
Section: Chapter Questions
Problem 10DQ: The chapter presented various approaches for the control of inventory investment. Discuss three...
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