Score: 0 of 20 pts 40f 4 (2 complete) Hw Score: 28.75%, 23 of 80 p Problem 12.18

Question

Score: 0 of 20 pts 40f 4 (2 complete) Hw Score: 28.75%, 23 of 80 p Problem 12.18 Question Help Race One Motors is an Indonesian car manufacturer. At its largest manufacturing facility, in Jakarta, the company produces subcomponents at a rate of 305 per day and it uses these subcomponents at a rate of 12,300 per year (of 250 working days). Holding costs are $2 per item per year, and ordering costs are $32 per order a) What is the economic production quantity 685.13 units (round your response to two decimal places). b) How many production runs per year wil be made? production runs ro und your response to two decimal places

Explanation / Answer

production rate (p) = 305 per day

Annual demand (D) = 12300

usage rate (u) = 12300/250 = 49.2 per day

Holding cost (H) = 2

Ordering cost (S) = 32

a) EOQ = sqrt(2*D*S/H)*sqrt(p/(p-u)) = sqrt(2*12300*32/2)*sqrt(305/(305-49.2)) = 685.19 units

b) Number of production runs = D/EOQ = 12300/685.19 = 17.95

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