Question
Bob's Bumpers hasa repetitive manufacturing facility in Kentucky that makes automobile bumpers and other auto body parts. The facility operates 300days per year and has
Bob's Bumpers hasa repetitive manufacturing facility in Kentucky that makes automobile bumpers and other auto body parts. The facility operates 300days per year and has annual demand of 72,000 bumpers. They can produce up to 360 bumpers each day. It costs $53to set up the production line to produce bumpers. The cost of each bumper is $149and annual holding costs are $35 per unit. Setup labor cost is$22per hour. What is the optimal size of the production run for bumpers? (Display your answer to the nearest whole number.) Based on your answer to the previous question, and assuming the manufacturer holds no safety stock, what would be the average inventory for these bumpers? (Display your answer to the nearest whole number.) Based on your answer two questions back, how many production runs will be required each year to satisfy demand? HINT: As a general rule, whenever calculating a value that is based on previous calculations in Excel, always be sure to use cell references rather than a rounded value as a calculationinput. (Display your answer to the appropriatewhole number.) Suppose the customer (an auto manufacturer) wants to purchase in lots of 340 and that Bob's Bumpers is able to reduce setup costs to the point where 340 is now the optimal production run quantity. How much will they save in annual holding costs with this new lower production quantity? (Display your answer to two decimal places.)
How much will they save in annual setupcosts with this new lower production quantity?(Display your answer to two decimal places.)
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