SAB Manufacturing Company produces bicycle parts in batches. The demand for the parts is 200 units per month. The holding cost per unit per year is $3. The set-up cost is $50 per production run. The parts can be produced at the rate of 40 unit per day and the daily demand is 9.6 units. The company operates 250 days in a year. Determine: a. Optimal quantity for each production run b. Length of each production cycle c. Number of set-ups per year.

SAB Manufacturing Company produces bicycle parts in batches. The demand for the parts is 200 units per month. The holding cost per unit per year is $3. The set-up cost is $50 per production run. The parts can be produced at the rate of 40 unit per day and the daily demand is 9.6 units. The company operates 250 days in a year. Determine: a. Optimal quantity for each production run b. Length of each production cycle c. Number of set-ups per year.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 14MC: A company produces two products. E and F in batches of 100 units. The production and cost data are:...

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