REQUIREMENT #4 (25 points): Electronex maintains a continuous inventory of its h
ID: 3055789 • Letter: R
Question
REQUIREMENT #4 (25 points): Electronex maintains a continuous inventory of its highest qualty circuit board he company and that are needed to meet the demand for the end items that use the always assumed that the demand for the circuit boards is constant at year. Each circuit board costs $14.50. The holding cost is determi 18% of the cost of each circuit board held and it can produce 25,000 circuit boards per year production run of its circuit boards. boards. The company has 7.200 circuit boards per in inventory. Electronex operates 250 days per year . It costs Electronex $150 to set up each (SHOW YOUR WORK) a. (10 points) Determine the optimal order quantity for the circuit board inventory assumptions and conditions. y under these b. (5 points) Given this inventory plan, how long will each production run take? c. (5 points) Given this inventory plan, what is the largest number of circuit boards on hand? d. (5 points) Given this inventory plan, how long is the inventory's cycle time?Explanation / Answer
EPQ = SQRT(2KD / h(1-x)) K = ordering/setup cost 150 $ D = demand rate 7200 Unit Cost 14.5 $ h = holding cost 2.61 $ P = production rate 25000 x = D/P 0.288 Working days in a year 250 Q = SQRT(2KD / h(1-x)) 1078.118815 Daily production rate p (P/number of working days) 100 units/day Production run time (Q/p) 10.78119 days Maximum inventory on hand Q(1-(D/P)) 767.6206 units Daily demand rate d (D/number of working days) 28.8 units/day Inventory cycle time (Q/d) 37.43468 days
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