1. Toy-N-Toy Company has a steady and constant demand of 12,000 Type-X toys per year. TNT's production department estima

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1 Toy N Toy Company Has A Steady And Constant Demand Of 12 000 Type X Toys Per Year Tnt S Production Department Estima 1 (202.36 KiB) Viewed 37 times

1. Toy-N-Toy Company has a steady and constant demand of 12,000 Type-X toys per year. TNT's production department estimated $240 per production setup to make Type-X toys (Co). It costs $12.00 per Type-X toy to hold (carry) for a year. The production department calculated the daily production rate of 180 Type-X toys with increment of 10 Type-X toys. The TNT Company operates 250 days per year. The production cost (r) is calculated as $7.50 per Type-X toy. Determine: a) Optimal batch size of Type-X toys to produce. (12) (4) b) Maximum inventory level of Type-X toys. c) TNT's ICM (Inventory Control and Management) section allocated space for Type-X toy to hold a maximum of 510 type-x toys. Determine and specify the effect of allocated space on the batch size and corresponding total inventory cost. (8) d) Due to the sudden increase on demand on other products, the production department re-assigned production resources to accommodate the sudden increase in demand. As a result, the daily production rate of Type-X toys decreased to 100 per day. i. What should be the new batch size? (8) (4) ii. What is the new yearly Total Cost for Type-X toys? iii. Does this reduction in production rate of Type-X toy satisfy the storage space limitation? Justify your answer. (4)