QUESTION 14 a part it uses in an assembly operation at the rate of 50 an hour Th

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QUESTION 14 a part it uses in an assembly operation at the rate of 50 an hour The company operates eight hous a day, 300 days a yeat Daily usage of the part is 300 parts. The company uses the part every day The run size is 6,000 parts. The annual holding cost is $2 per unit, and setup cost is $100 A) How many rans per year will there be? (B) What is the production nun time? (C) What is the cycle time? (D) What is the Total cost for this company related to production of this part? Show your work Save Al

Explanation / Answer

R Rate of production 50 units per hour O Operation hours 8 Hours per day W Working 300 Days per year Production capacity 120000 units R*O*W DP Daily production 400 units R*O K Setup cost 100 $ h Holding cost 2 $ d Daily demand 300 units D Annual demand 90000 units EOQ (Sqrt(2*k*D/h) 3000 N No of orders 30 Orders Total orders/EOQ Ans A Toc Total ordering cost annualy 3000 $ N*K Thc Annual Holding cost 3000 $ EOQ*h/2 TC Total cost 6000 $ (Toc+Thc) Ans D Length of order cycle 10 Days (W/N) Ans C P Production run time 60 Hours EOQ/R Ans B 7.5 Days P/O Ans B

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