Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Emarpy Appliance is a company that produces all kinds of major appliances. Bud Banis, the president of Emarpy, is concerned about the production policy for

Emarpy Appliance is a company that produces all kinds of major appliances. Bud Banis, the president of Emarpy, is concerned about the production policy for the company's best-selling refrigerator. The annual demand for this has been about 7,500 units each year, and this demand has been constant throughout the year. The production capacity is 210 units per day. Each time production starts, it costs the company $120 to move materials into place, reset the assembly line, and clean the equipment. The holding cost of a refrigerator is $46 per year. The current production plan calls for 420 refrigerators to be produced in each production run. Assume there are 250 working days per year.
Part 2
a) What is the daily demand of this product? 3030 units (enter your response as a whole number).
Part 3
b) If the company were to continue to produce 420 units each time production starts, how many days would production continue? 22 days (enter your response as a whole number).
Part 4
c) Under the current policy, how many production runs per year would be required? 1818 runs (round your response to the nearest whole number).
Part 5
What would the annual setup cost be?$21602160(round your response to the nearest whole number).
Part 6
d) If the current policy continues, how many refrigerators would be in inventory when production stops? 360360 units (round your response to the nearest whole number).
Part 7
What would the average inventory level be?180180 units (round your response to the nearest whole number).
Part 8
e) If the company produces 420 refrigerators at a time, what would the total annual setup cost and holding cost be?$1044010440(round your response to the nearest whole number).
Part 9
f) If Bud Banis wants to minimize the total annual inventory cost, how many refrigerators should be produced in each production run? 214214 units(round your response to the nearest whole number).
Part 10
How much would this save the company in inventory costs compared to the current policy of producing 420 units in each production run? $enter your response here (round your response to the nearest whole number).

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

General And Industrial Management

Authors: Henri Fayol, Constance Storrs

1st Edition

1614274592, 978-1614274599

More Books

Students also viewed these General Management questions

Question

What are the purposes of strategic planning?

Answered: 1 week ago

Question

6. What qualifications are needed to perform the job?

Answered: 1 week ago