A company manufactures hair dryers. It buys some of the components, but it makes the heating element, which it can produce at the rate of 800 per day. Hair dryers are assembled 250 days a year, at a rate of 300 per day. Because of the disparity between the production and usage rates, the heating elements are periodically produced in batches of 2,000 units.
a. Approximately how many batches of heating elements are produced annually?
b. If production on a batch begins when there is no inventory of heating elements on hand, how much inventory will be on hand (i.e., in inventory) two days later?
c. What will be the average level of inventory' of the heating element, assuming each production cycle begins when there are no inventory on hand?
d. The same equipment drat is used to make the heating element could also be used to make a component for another of the company’s products. That job would require four days per cycle of die element. Setup time for making a batch of the heating elements is a half day. Is there enough time to do this job between production of batches of heating element? Explain.