Arthur Meiners is the production manager of Wheel-Rite, a small producer of meta

Question

Arthur Meiners is the production manager of Wheel-Rite, a small producer of metal parts. Wheel-Rite supplies Cal-Tex, a larger assembly company, with 9,800 wheel bearings each year. This order has been stable for some time. Setup cost for Wheel-Rite is $41, and holding cost is $0.60 per wheel bearing per year. Wheel-Rite car produce 530 wheel bearings per day. Cal-Tex is a just-in-time manufacturer and requires that 51 bearings be shipped to it each business day. a) what is the optimum production quantity?? units round your response to the nearest whole number

Explanation / Answer

Annual demand, D = 9800

Demand rate, d = 51 per day

Production rate, p = 530 per day

Setup cost, S = $ 41

Holding cost, H = $ 0.6

Optimum Production Quantity = SQRT(2*D*S/(H*(1-d/p)))

= SQRT(2*9800*41/(0.6*(1-51/530)))

= 1,217 units

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.