Rick Wing has a repetitive manufacturing plant producing automobile steering whe

Question

Rick Wing has a repetitive manufacturing plant producing automobile steering wheels. Use the following data to prepare for a reduced lot size. The firm uses a work year of 300 days. Setup labor cost Annual holding cost Daily production (8 hours) Annual demand for steering wheels Desired lot size (2 hours of production) $60.00 per hour $18 per unit 880 units/day 33,000 (300 days x daily demand of 110 units) Q-220 units a) Setup cost (round your response to two decimal placesj b) Setup timeminutes (round your response to two decimal places)

Explanation / Answer

Q* = sqrt(2*D*S/H(1-d/p)) Where D is annual demand S = setup cost H = holding cost d = daily demand p = daily production S = Q2H(1-d/p)/2D S = (220^2*18*(1-110/880))/(2*33000) S = $    11.55 Setup time 11.55*60/60 Setup time 11.55 mins

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