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 Annual holding cost $30 per hour $13 per unit 960 units/8 hour day 36,000 (250 days each x daily demand of 144 units) Daily production Annual demand Desired lot size 120 units (one hour of production) To obtain the desired lot size, the set-up time that should be achieved = ☐ minutes (round your response to two decimal places).

Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
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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
Annual holding cost
$30 per hour
$13 per unit
960 units/8 hour day
36,000 (250 days each x daily demand of 144 units)
Daily production
Annual demand
Desired lot size
120 units (one hour of production)
To obtain the desired lot size, the set-up time that should be achieved = ☐ minutes (round your response to two decimal places).
Transcribed Image Text: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 Annual holding cost $30 per hour $13 per unit 960 units/8 hour day 36,000 (250 days each x daily demand of 144 units) Daily production Annual demand Desired lot size 120 units (one hour of production) To obtain the desired lot size, the set-up time that should be achieved = ☐ minutes (round your response to two decimal places).
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