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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 bestselling refrigerator. The annual demand for this has been about units each year, and this demand has been constant throughout the year. The production capacity is units per day. Each time production starts, it costs the company $ to move materials into place, reset the assembly line, and clean the equipment. The holding cost of a refrigerator is $ per year. The current production plan calls for refrigerators to be produced in each production run. Assume there are working days per year.
Part
a What is the daily demand of this product? units enter your response as a whole number
Part
b If the company were to continue to produce units each time production starts, how many days would production continue? days enter your response as a whole number
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c Under the current policy, how many production runs per year would be required? runs round your response to the nearest whole number
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What would the annual setup cost be$round your response to the nearest whole number
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d If the current policy continues, how many refrigerators would be in inventory when production stops? units round your response to the nearest whole number
Part
What would the average inventory level be units round your response to the nearest whole number
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e If the company produces refrigerators at a time, what would the total annual setup cost and holding cost be$round your response to the nearest whole number
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f If Bud Banis wants to minimize the total annual inventory cost how many refrigerators should be produced in each production run? unitsround your response to the nearest whole number
Part
How much would this save the company in inventory costs compared to the current policy of producing units in each production run? $enter your response here round your response to the nearest whole number
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