Practical Operations Management
2nd Edition
ISBN: 9781939297136
Author: Simpson
Publisher: HERCHER PUBLISHING,INCORPORATED
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Chapter 12, Problem 16P
Summary Introduction
Interpretation: Number of parts created each day needs to be determined using level
Concept Introduction: Level scheduling is an approach towards manufacturing which tends to maintain a constant and smooth flow of production over the period.
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A company has an annual demand for a product of 2000 units, a carrying cost of $20 per unit per year, and a setup cost of $100. Through a program of setup reduction, the setup cost is reduced to $20. Run costs are $2 per unit. Calculate:
The EOQ before setup reduction.
The EOQ after setup reduction.
The total and unit cost before and after setup reduction.
The demand for screens for a computer manufacturer is 10,000 per week. The lead time is 5 days, and this manufacturer wants to hold 2 days of safety stock. If the container size of computers is 200, what is the Kanban number? If the lead time improves to 4 days, what is the Kanban number? If the lead time moves out to 6 days and the manufacturer wants 3 days of safety stock, what is the Kanban number?
A company has an annual demand for a product of 2000 units, a carrying cost of $20per unit per year, and a setup cost of $100. Through a program of setup reduction, thesetup cost is reduced to $20. Run costs are $2 per unit. Calculate:
The EOQ before setup reduction.
The EOQ after setup reduction.
The total and unit cost before and after setup reduction.
Chapter 12 Solutions
Practical Operations Management
Ch. 12 - Prob. 1DQCh. 12 - Prob. 2DQCh. 12 - Prob. 3DQCh. 12 - Prob. 4DQCh. 12 - Prob. 5DQCh. 12 - Prob. 6DQCh. 12 - Prob. 1PCh. 12 - Prob. 2PCh. 12 - Prob. 3PCh. 12 - Prob. 4P
Ch. 12 - Prob. 5PCh. 12 - Prob. 6PCh. 12 - Prob. 7PCh. 12 - Prob. 8PCh. 12 - Prob. 9PCh. 12 - Prob. 10PCh. 12 - Prob. 11PCh. 12 - Prob. 12PCh. 12 - Prob. 13PCh. 12 - Prob. 14PCh. 12 - Prob. 15PCh. 12 - Prob. 16PCh. 12 - Prob. 17PCh. 12 - Prob. 18PCh. 12 - Prob. 19PCh. 12 - Prob. 20PCh. 12 - Prob. 21PCh. 12 - Prob. 22PCh. 12 - Prob. 23PCh. 12 - Prob. 24PCh. 12 - Prob. 25PCh. 12 - Prob. 26PCh. 12 - Prob. 27PCh. 12 - Prob. 1.1QCh. 12 - Prob. 1.2QCh. 12 - Prob. 1.3QCh. 12 - Prob. 1.4QCh. 12 - Prob. 2.1QCh. 12 - Prob. 2.2QCh. 12 - Prob. 2.3QCh. 12 - Prob. 3.1QCh. 12 - Prob. 3.2QCh. 12 - Prob. 3.3Q
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- Which of the following does not belong to the seven sources of waste?a. Reworkb. Overtimec. Transportationd. Inventoryarrow_forwardDETERMINING THE NUMBER OF KANBAN CONTAINERS Hobbs Bakery produces short runs of cakes that are shipped to grocery stores. The owner, Ken Hobbs,wants to try to reduce inventory by changing to a kanban system. He has developed the following dataand asked you to finish the project.Production lead time = Wait time + Material handling time + Processing time = 2 daysDaily demand = 500 cakesSafety stock = 12 dayContainer size (determined on a production order size EOQ basis) = 250 cakesarrow_forwardA firm wants to justify smaller lot sizes economically.Management knows that it cannot change the cost tocarry one unit in inventory since this is largely basedon the value of the item. To justify a smaller lot size,what must it do?arrow_forward
- Crimson Wheels Bus Company produces buses. In order to produce the seats for the buses, special equipment must be set up. The setup cost per frame is $20. The cost of carrying seats in inventory is $5 per seat per year. The company produces 125,000 buses per year.The number of seats that should be produced per setup in order to minimize the total setup and carrying costs is: a.2,200 seats. b.1,920 seats. c.3,000 seats. d.1,000 seats.arrow_forwardIn each of the following, name the term defined or answer the question. Answers are listed at the bottom. This means producing only what is needed when needed and no more. A period of time during which the production schedule cannot be changed. Producing a mix of products that matches demand as closely as possible. A production control system that uses a signaling device to regulate the flow of material. If the lead time for an item is exactly five days, the demand is a constant four units per day, and the shipment container contains two units, how many kanban card sets would be needed? (Assume 0 percent safety stock.) A firm wants to justify smaller lot sizes economically. Management knows that it cannot change the cost to carry one unit in inventory because this is largely based on the value of the item. To justify asmaller lot size, what must it do?arrow_forwardKrupp Refrigeration, Inc., is trying to reduce inventory and wants you to install a kanban system for compressors on one of itsassembly lines. Determine the size of the kanban and the number of kanbans (containers) needed.Setup cost = $10Annual holding cost per compressor = $100Daily production = 200 compressorsAnnual usage = 25,000 (50 weeks * 5 days each * daily usage of 100 compressors)Lead time = 3 daysSafety stock = 1 2 day’s production of compressorsarrow_forward
- Carol Cagle has a repetitive manufacturing plant producing trailer hitches in Arlington, Texas. The plant has an average inventory turnover of only 12 times per year. He has therefore determined that he will reduce his component lot sizes. He has developed the following data for one component, the safety chain clip: Setup labor cost $20 per hour Annual holding cost $15 per unit Daily production 992 units/8 hour day Annual demand 36,000 (250 days each×daily demand of 144 units) Desired lot size 124 units (one hour of production) To obtain the desired lot size, the set-up time that should be achieved = nothing minutes (round your response to two decimal places).arrow_forwardUse of value stream mapping requires construction of a current state drawing, a future state drawing, and an implementation plan.arrow_forwardOne inherent risk to using lean principles is that companies are at higher risk of inventory shortages during volatile times caused by strikes, adverse weather, etc., than when using traditional manufacturing principles. True Falsearrow_forward
- The Toyota Production System identified which of the following types of waste to be eliminated?A. Excess quality B. Motion C. Excess capacity D. Underproduction E. Excess demandarrow_forwardA certain piece of production equipment is used to produce various components for an assembled product of the XYZ Company. To keep in-process inventories low, it is desired to produce the components in batch sizes of 150 units (daily requirements for assembly). Demand for each product is 2500 units per year. Production downtime costs an estimated $200/hr. All of the components made on the equipment are of approximately equal value: Cp = $9.00/unit. Holding cost rate = 30%/yr. In how many minutes must the changeover (setup) between batches be completed in order for 100 units to be the economic order quantity?arrow_forwardConstruct a value stream map for the following processes. a. Cafeteriab. Grocery storearrow_forward
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