The dressings division of Strital produces sterile wound dressings in clean-room conditions. Because of the risk of
Question:
The dressings division of Strital produces sterile wound dressings in clean-room conditions. Because of the risk of cross infection the entire process must be cleaned and sterilized between batches of each product. This cleaning process takes 30 minutes. After manufacture, the dressings are stored in low-temperature sterile conditions in order to maintain their effectiveness. The cost to the company of running the storage area is £8000 per week. The demand for each type of dressing is currently 5000 per week. The manufacturing process is capable of producing at a rate of 175 dressings per hour irrespective of which product is being produced. The total operating cost (excluding materials etc.) for the production process is £1000 per hour irrespective of whether anything is being made or not. Assuming that the manufacturing process operates for 40 hours a week,
(a) What is the economic batch quantity for the company's products
(b) If demand increases to 6000 dressings per week for each product, how will the economic batch quantity change?
Step by Step Answer:
Operations Management
ISBN: 9780273708476
5th Edition
Authors: Nigel Slack, Stuart Chambers, Robert Johnston