![By Jay Heizer Barry Render Operations Management, Sustainability and Supply Chain Management (11th) [Paperback]](https://s3.amazonaws.com/compass-isbn-assets/textbook_empty_images/large_textbook_empty.svg)
By Jay Heizer Barry Render Operations Management, Sustainability and Supply Chain Management (11th) [Paperback]
7th Edition
ISBN: 9781269261630
Author: Jay Heizer
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Textbook Question
Chapter 12, Problem 17P
Radovilsky Manufacturing Company, in Hayward, California, makes flashing lights for toys. The company operates its production facility 300 days per year. It has orders for about 12,000 flashing lights per year and has the capability of producing 100 per day. Setting up the light production costs $50. The cost of each light is $1. The holding cost is $0.10 per light per year.
- a. What is the optimal size of the production run?
- b. What is the average holding cost per year?
- c. What is the average setup cost per year?
- d. What is the total cost per year, including the cost of the lights?
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Radovilsky Manufacturing Company, in Hayward, California, makes flashing lights for toys. The company operates its production facility 300 days per year. It has orders for about 12,300 flashing lights per year and has the capability of producing 100 per day. Setting up the light production costs $51. The cost of each light is $0.95. The holding cost is $0.05 per light per year.
Radovilsky Manufacturing Company, in Hayward, California, makes flashing lights for toys. The company operates its production facility 300days per year. It has orders for about
11,600 flashing lights per year and has the capability of producing
100 per day. Setting up the light production costs $51. The cost of each light is $0.95.
The holding cost is $0.10 per light per year.
a) What is the optimal size of the production run?
nothing units (round your response to the nearest whole number).
A manufacturing company produces furniture products. The company operates 300 working-day per year. It has orders for about 12,000 products per year. Its factory has the capability of producing 100 per day. Setting up the product production costs SR 50 The cost of each furniture product is SR 1 The holding cost is SR 0.10 per product per year.
What is the optimal size of the production run?
Chapter 12 Solutions
By Jay Heizer Barry Render Operations Management, Sustainability and Supply Chain Management (11th) [Paperback]
Ch. 12 - Question 1. Describe the four types of inventory.Ch. 12 - Question
2. With the advent of low-cost...Ch. 12 - Question
3. What is the purpose of the ABC...Ch. 12 - Question
4. Identify and explain the types of...Ch. 12 - Question 5. Explain the major assumptions of the...Ch. 12 - Question 6. What is the relationship of the...Ch. 12 - Question
7. Explain why it is not necessary to...Ch. 12 - Question 8. What are the advantages of cycle...Ch. 12 - What impact does a decrease in setup time have on...Ch. 12 - When quantity discounts are offered, why is it not...
Ch. 12 - What is meant by service level?Ch. 12 - Explain the following: All things being equal, the...Ch. 12 - Describe the difference between a fixed-quantity...Ch. 12 - Explain what is meant by the expression robust...Ch. 12 -
15. What is “safety stock”? What does safety...Ch. 12 - When demand is not constant, the reorder point is...Ch. 12 - How are inventory levels monitored in retail...Ch. 12 - State a major advantage, and a major disadvantage,...Ch. 12 - L. Houts Plastics is a large manufacturer of...Ch. 12 - Boreki Enterprises has the following 10 items in...Ch. 12 - Jean-Marie Bourjollys restaurant has the following...Ch. 12 - Lindsay Electronics, a small manufacturer of...Ch. 12 - William Bevilles computer training school, in...Ch. 12 - • 12.6 If D = 8,000 per month, S = $45 per order,...Ch. 12 - Henry Crouchs law office has traditionally ordered...Ch. 12 - Matthew Liotines Dream Store sells beds and...Ch. 12 - Southeastern Bell stocks a certain switch...Ch. 12 - Lead time for one of your fastest-moving products...Ch. 12 - Annual demand for the notebook binders at Duncans...Ch. 12 - Thomas Kratzer is the purchasing manager for the...Ch. 12 - Joe Henrys machine shop uses 2,500 brackets during...Ch. 12 - Abey Kuruvilla, of Parkside Plumbing, uses 1,200...Ch. 12 - ••• 12.15 M. Cotteleer Electronics supplies...Ch. 12 - •• 12.16 Race One Motors is an Indonesian car...Ch. 12 - Radovilsky Manufacturing Company, in Hayward,...Ch. 12 - Arthur Meiners is the production manager of...Ch. 12 - Cesar Rego Computers, a Mississippi chain of...Ch. 12 - Bell Computers purchases integrated chips at 350...Ch. 12 - Wang Distributors has an annual demand for an...Ch. 12 - Question 12.22 The catering manager of La Vista...Ch. 12 - Prob. 23PCh. 12 - Prob. 24PCh. 12 - Prob. 25PCh. 12 - Question 12.26 Emery Pharmaceutical uses an...Ch. 12 - Question 12.27 Barbara Flynn is in charge of...Ch. 12 - Question 12.28 Based on available information,...Ch. 12 - Question 12.29 Authentic Thai rattan chairs...Ch. 12 - Question 12.30 Tobacco is shipped from North...Ch. 12 - Prob. 31PCh. 12 - Question 12.32 Chicagos Hard Rock Hotel...Ch. 12 - Question 12.33 First Printing has contracts with...Ch. 12 - Prob. 34PCh. 12 - Prob. 35PCh. 12 - Question 12.36 Cynthia Knotts oyster bar buys...Ch. 12 - Question 12.37 Henrique Correas bakery prepares...Ch. 12 - Question 12.38 University of Florida football...Ch. 12 - Prob. 39PCh. 12 - Question 12.40 A gourmet coffee shop in downtown...Ch. 12 - Question Zhou Bicycle Company Zhou Bicycle...Ch. 12 - Question Zhou Bicycle Company Zhou Bicycle...Ch. 12 - Question Zhou Bicycle Company Zhou Bicycle...Ch. 12 - Parker Hi-Fi Systems Parker Hi-Fi Systems, located...Ch. 12 - Parker Hi-Fi Systems Parker Hi-Fi Systems, located...Ch. 12 - Parker Hi-Fi Systems Parker Hi-Fi Systems, located...Ch. 12 - Question Frito-Lay has flourished since its...Ch. 12 - Question Frito-Lay has flourished since its...Ch. 12 - Question Frito-Lay has flourished since its...Ch. 12 - Question Frito-Lay has flourished since its...Ch. 12 - Question Frito-Lay has flourished since its...Ch. 12 - Question Frito-Lay has flourished since its...Ch. 12 - Question Frito-Lay has flourished since its...Ch. 12 - Inventory Control at Wheeled Coach Video Case...Ch. 12 - Prob. 2.2VCCh. 12 - Prob. 2.3VC
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, operations-management and related others by exploring similar questions and additional content below.Similar questions
- 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 250 housings per month, and shipped to the main plant in Toronto. The housings cost HAL $100 each to produce, and the setup cost for beginning a production run is $500. HAL uses the drive housings at a fairly steady rate of 1400 per year. Assume an annual interest rate of 25% for determining the holding cost. What is the optimal number of housings for HAL to produce in each production run? For the optimal production size, what proportion of each production cycle consists of uptime and what proportion consists of downtime? 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?arrow_forwardManufacture MTN has orders for about 100,000 units of its product for the entire year and has the capability of producing 500 units per day. MTN operates its facility 250 days per year. Setting up the production costs $50. The per unit cost of producing the component is $1. The holding cost is estimated to be $2 per unit per year.a) What is the optimal production order quantity for this product?b) What is the total annual cost MTN incurs using this optimal production order quantity?arrow_forwardRocky Mountain Tire Centre sells 20,000 tires of a particular type per year. The ordering cost for each order is $40, and the holding cost is 20% of the purchase price of the tires per year. The purchase price is $20. per tire if fewer than 500 tires are ordered, $18. Per tire if more than 500 but fewer than 1,000 tires are ordered and $17. per tire if 1,000 or more tires are ordered. How many tires should Rocky Mountain order each time it places an order? Quantity Unit Price 1-499 $20. 500-999 $18. 1000 & over $17 Based on available information, lead time demand for CD-ROM drives averages 50 units (normally distributed), with a standard deviation of 5 drives. Management wants a 97% service level. What value of Z should be applied? How many drives should be carried as safety stock?arrow_forward
- Sharpe Cutter is a small company that produces specialtyknives for paper cutting machinery. The annual demand fora particular type of knife is 100,000 units. The demand is uni-form over the 250 working days in a year. Sharpe Cutter pro-duces this type of knife in lots and, on average, can produce450 knives a day. The cost to set up a production lot is $300,and the annual holding cost is $1.20 per knife.a. Determine the economic production lot size (ELS).b. Determine the total annual setup and inventory holdingcost for this item.c. Determine the TBO, or cycle length, for the ELS.d. Determine the production time per lot.arrow_forwardThe manager of a depanneur on Ste-Catherine’s street sells 5 cases of Corona per day. The order costs are $20 per order, Corona beers cost $15 per 12-pack, and each cash contains 6 12-packs. Orders arrive four days after they are placed, and the daily holding cost is 5% of the cost of the case. Assuming the stores supplier will give a 10% discount on orders exceeding 20 cases, how units should the manager order each time?arrow_forwardAssume that Triksi Co. makes footballs and is trying to determine the quantity of leather it should order every time an order is placed. The relevant information is as follows: I. Over the course of a year 12,000 square meters of leather will be needed, II. The cost of storing 1 square meter of leather is $3, and III. The cost of placing an order is $450 Show Computations and Explanations. A. What is the EOQ? (Formula: 1,111)arrow_forward
- 1. A service station uses 2500 oil filters during the course of a year, and this usage is constant throughout the year. These oil filters are purchased from a supplier 100 miles away for $15 each, and the lead time is 2 days. The holding cost per oil filter per year is $1.50 (or 10% of the unit cost) and the ordering cost is $18.75. There are 250 working days per year. The station manager wants to re-consider his decision of buying the oil filters and is considering making the oil filters in-house. He has determined that set-up cost would be $25 in machinist time and lost production time. He estimates that the cost (inclusiveof materials and labor time) of producing one oil filter would be $14.80, and that holding cost will be 10% of this cost. a) What is the station's optimal production quantity? b) If the station uses the optimal production quantity, what would be the annual total cost of inventory?arrow_forward1. A service station uses 2500 oil filters during the course of a year, and this usage is constant throughout the year. These oil filters are purchased from a supplier 100 miles away for $15 each, and the lead time is 2 days. The holding cost per oil filter per year is $1.50 (or 10% of the unit cost) and the ordering cost is $18.75. There are 250 working days per year. The station manager wants to re-consider his decision of buying the oil filters and is considering making the oil filters in-house. He has determined that set-up cost would be $25 in machinist time and lost production time. He estimates that the cost (inclusive of materials and labor time) of producing one oil filter would be $14.80, and that holding cost will be 10% of this cost. a) What is the station's optimal production quantity? b) If the station uses the optimal production quantity, what would be the annual total cost of inventory?arrow_forward1. A service station uses 2500 oil filters during the course of a year, and this usage is constant throughout the year. These oil filters are purchased from a supplier 100 miles away for $15 each, and the lead time is 2 days. The holding cost per oil filter per year is $1.50 (or 10% of the unit cost) and the ordering cost is $18.75. There are 250 working days per year. a) the manager decided to change its inventory control model to a fixed time model, with the same lead time of 2 days and placing orders every 2 weeks, with the suppliers. Average daily demand remains at 10 and the standard deviation is 2.5. Currently there are 700 units of inventory on hand. What size orders should he place with suppliers?arrow_forward
- XYZ Inc. needs 400 kgs of a material per month. It costs OMR 100 to make and receive an order, and it takes 12 workdays to receive it. The annual holding cost is 15 % of purchase price. The price OMR 1 per kg. The company is operating workdays per week in a 52-week year. At what level of inventory in Kgs should the company be placing orders ? Round-up to the nearest integerarrow_forwardPlease do not give solution in image formate thanku. Race One Motors is an Indonesian car manufacturer. At its largest manufacturing facility, in Jakarta, the company produces subcomponents at a rate of 300 per day, and it uses these subcomponents at a rate of 12,500 per year (of 250 working days). Holding costs are $22 per item per year, and ordering costs are $32 per order. a) What is the economic production quantity b) how many production runs will be made each year c) what is the max inventory level d) what percentage of time will the facility be producing components e) what is the annual cost of ordering and holding inventoryarrow_forwardCooler Corporation is a manufacturer of cooling products. It purchases 14,400 units of a particular component (CK55) each year at a cost of $60 per unit. Cooler Corporation requires a 12% annual rate of return on investment. In addition, relevant carrying costs for insurance, material-handling, and breakage are $0.40 per unit per quarter, whereas warehousing rental cost is $12,000 per month. Relevant costs per purchase order are $144.00. Purchasing manager’s salary is $80,000 per year. Required: Calculate Cooler’s EOQ for CK55. Calculate Cooler’s total ordering and carrying costs. Assume that demand is uniform throughout the year and is known with certainty. The purchasing time is half a month. Calculate the reorder point for CK55.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Practical Management ScienceOperations ManagementISBN:9781337406659Author:WINSTON, Wayne L.Publisher:Cengage,
Practical Management Science
Operations Management
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:Cengage,
Inventory Management | Concepts, Examples and Solved Problems; Author: Dr. Bharatendra Rai;https://www.youtube.com/watch?v=2n9NLZTIlz8;License: Standard YouTube License, CC-BY