An injection-molding machine used to produce 25 different plastic molded parts in a typical year. Annual demand for a typical part is 20,000 units. Each part is made out of a different plastic (the differences are in type of plastic and color). Because of the differences, changeover time between parts is significant, averaging 5 hours to (1) change molds and (2) purge the previous plastic from the injection barrel. One setup person normally does these two activities sequentially. A proposal has been made to separate the tasks and use two setup persons working simultaneously. In that case, the mold can be changed in 1.5 hours and purging takes 3.5 hours. Thus, the total downtime per changeover will be reduced to 3.5 hours from the previous 5 hours. Downtime on the injection-molding machine is $200/hr. Labor cost for setup time is $20/hr. Average cost of a plastic molded part is $2.50, and holding cost is 24% annually. For the 5-hour setup, determine
(a) The economic batch quantity,
(b) The total number of hours per year that the injection-molding machine is down for changeovers, and
(c) The annual inventory cost. For the 3.5-hour setup, determine
(d) The economic batch quantity,
(e) The total number of hours per year that the injection-molding machine is down for changeovers, and
(f) The annual inventory cost.