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Arthur Meiners is the production manager of Wheel-Rite, a small producer of metal parts in Kelowna, BC. Wheel-Rite supplies Cal-Tex, a larger assembly company, with
Arthur Meiners is the production manager of Wheel-Rite, a small producer of metal parts in Kelowna, BC. Wheel-Rite supplies Cal-Tex, a larger assembly company, with 10 000 wheel bearings each year. This order has been stable for some time. Setup cost for Wheel-Rite is $40, and holding cost is $0.60 per wheel bearing per year. Wheel-Rite can produce 500-wheel bearings per day. Cal-Tex is a just-in-time manufacturer and requires that 50 bearings be shipped to it each business day.
- What is the optimum production quantity?
- What is the maximum number of wheel bearings that will be in inventory at Wheel-Rite?
- How many production runs of wheel bearings will Wheel-Rite have in a year?
- What is the total setup plus holding cost for Wheel-Rite?
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