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October 20, 2014

October 20, 2014

Posted by **D.Martin** on Thursday, April 26, 2007 at 11:00am.

Annual demand (D)=50,000 units

Set-up 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 9:28pmEach 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 one-half 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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