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Bill penny has a repetitive manufacturing plant producing trailer hitches in Arlington, Texas. The plant has an average inventory turnover of only 12 times per
Bill penny has a repetitive manufacturing plant producing trailer hitches in Arlington, Texas. The plant has an average inventory turnover of only 12 times per year. He has therefore determined that he will reduce his component lot sizes. He has developed the following data for one component, the safety chain clips: Annual Demand 31,200 units Daily Demand 120 units Daily production (in hours) = 960 units Desired lot size (1 hour of production) 120 units Holding cost per unit per year $12 Set-up labor cost per hour = $20 a) How many minutes of set-up time should he have his plant manager aim for regarding this component? b) Suppose they have now decided to aim for a desired lot size of 60 units. Do you think this is feasible given their current setup labor cost per hour? Bill penny has a repetitive manufacturing plant producing trailer hitches in Arlington, Texas. The plant has an average inventory turnover of only 12 times per year. He has therefore determined that he will reduce his component lot sizes. He has developed the following data for one component, the safety chain clips: Annual Demand 31,200 units Daily Demand 120 units Daily production (in hours) = 960 units Desired lot size (1 hour of production) 120 units Holding cost per unit per year $12 Set-up labor cost per hour = $20 a) How many minutes of set-up time should he have his plant manager aim for regarding this component? b) Suppose they have now decided to aim for a desired lot size of 60 units. Do you think this is feasible given their current setup labor cost per hour
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