A company is about to begin production of a new product. The manager of the department that will produce one of the components for the product wants to know how often the machine used to produce the item will be available for other work. The machine will produce the item at a rate of 200 units a day. 83 units will be used daily in assembling the final product. Assembly will take place five days a week, 50 weeks a year. The manager estimates that it will take almost a full day to get the machine ready for a production run, at a cost of $300. Inventory holding costs will be $10 a year.
a.
What run quantity should be used to minimize total annual costs? (Do not round intermediate calculations. Round your final answer to the nearest whole number.)
Run quantity units
b.
What is the length of a production run in days? (Round your intermediate order quantity to nearest whole number. Round your answer to 2 decimal places.)
Run length days
c.
During production, at what rate will inventory build up?
Rate units per day
d.
If the manager wants to run another job between runs of this item, and needs a minimum of 10 days per cycle for the other work, will there be enough time?
There (is/is not) enough time.
e.
Given your answer to part d, the manager wants to explore options that will allow this other job to be performed using this equipment. Name three options the manager can consider. (You may select more than one answer. Click the box with a check mark for correct answers and click to empty the box for the wrong answers.)
Try to shorten setup time by .71 days.
Reduce the run size of the other job.
Increase the run quantity of the new product to allow a longer time between runs.
Try to shorten setup time by .30 hours.
Increase the run size of the other job.
f-1.
Suppose the manager decides to increase the run size of the new product. How many additional units would be needed to just accommodate the other job? (Round your intermediate order quantity to nearest whole number and final answer to 2 decimal places.)
Additional unit
f-2.
How much will that increase the total annual cost? (Round your intermediate order quantity to nearest whole number and final answer to 2 decimal places. Omit the "$" sign in your response.)
Answers: 2
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