Posted by D.Martin on Thursday, April 26, 2007 at 11:00am.
A toy manufacturing makes its own windup motors, which are then put into its toys. While the toy manufacturing process is continous, the motors are intermittent flow. Data on the manufacture of the motors appears below.
Annual demand (D)=50,000 units
Setup cost(S)=$85 per batch
Carry cost=$.20 per unit per year
Daily subassembly production rate=1,000
Daily subassembly usage rate=200
a. To minimize cost, how large should each batch of subassemblies be?
b. Approximatley how many days are required to produce a batch?
c.How long is a complete cycle?
d. What is the average inventory for this problem?
e.What is the total inventory cost (rounded to the nearest dollar) of the optimal behavior in this problem?

A. Production  Anonymous, Wednesday, December 9, 2009 at 9:28pm
Each batch should be 9014 units. It will take slightly over 9014 / 1000 =9 days to make these units. A complete cycle will last approximately 9014 / 200 = 45 days. Average inventory is 3,605 (not onehalf of 9014) and the annual costs will total $721.11.

A. Production  Anonymous, Wednesday, December 9, 2009 at 9:31pm
^^^
thats if Setup cost (S) = $65 per batch
and Carrying cost = $.10 per unit per year
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