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A toy manufacturer makes its own wind-up motors, which are then put into its toys. While the toy manufacturing process is continuous, the motors are
A toy manufacturer makes its own wind-up motors, which are then put into its toys. While the toy manufacturing process is continuous, the motors are intermittent flow. Data on the manufacture of the motors appears below. Annual demand (D) = 50,000 units Daily subassembly production rate = 1,000 Setup cost (S) = $10 per batch Daily subassembly usage rate = 200 Carrying cost = $0.20 per unit per year and the number of working days per year is 250. (a) To minimize cost, how large should each batch of subassemblies be? (4 pts) (b) Approximately how many days are required to produce a batch? (4 pts) (c) How long is a complete cycle? (4 pts) (d) What is the average inventory for this problem? (4 pts) (e) What is the total annual inventory cost (holding plus setup) of the optimal behavior in this problem? (4 pts)
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