Carol Cagle has a repetitive manufacturing plant producing trailer hitches in Arlington, Texas. The plant has an averag
Posted: Thu May 05, 2022 11:11 am
Carol Cagle has a repetitive manufacturing plant producing
trailer hitches in Arlington, Texas. The plant has an average
inventory turnover of only 12 times per year. He has therefore
determined that he will reduce his component lot sizes. He has
developed the following data for one component, the safety
chain clip:
Setup labor cost
$30 per hour
Annual holding cost
$13 per unit
Daily production
1,008 units/8 hour day
Annual demand
39,600 (275 days each×daily
Desired lot size
126 units (one hour of production)
To obtain the desired lot size, the set-up time that
should be achieved =
trailer hitches in Arlington, Texas. The plant has an average
inventory turnover of only 12 times per year. He has therefore
determined that he will reduce his component lot sizes. He has
developed the following data for one component, the safety
chain clip:
Setup labor cost
$30 per hour
Annual holding cost
$13 per unit
Daily production
1,008 units/8 hour day
Annual demand
39,600 (275 days each×daily
Desired lot size
126 units (one hour of production)
To obtain the desired lot size, the set-up time that
should be achieved =