M/s Kobo Bearings Ltd., is committed to supply 24,000 bearings per annum to M/s Deluxe Fans on a steady dailybasis. It is estimated that it costs 10 paisa as inventory holding cost per bearing per month and that the setup costper run of bearing manufacture is 324.(a) What is the optimum run size for bearing manufacture?(b) What should be the interval between the consecutive optimum runs?(c) Find out the minimum inventory holding cost.

Given Data:Annual Output: 24,000 bearingsSetup cost per run of bearing manufacture: ₹324Annual Cost…

Answered: M/s Kobo Bearings Ltd., is committed to…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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A part is produced in lots of 1,000 units. It is assembled from 2 components worth $50 total. The value added in production (for labor and variable overhead) is $60 per unit, bringing total costs per completed unit to $110. The average lead time for the part is 6 weeks and annual demand is 3,800 units, based on 50 business weeks per year.a. How many units of the part are held, on average, in cycle inventory? What is the dollar value of this inventory?b. How many units of the part are held, on average, in pipeline inventory? What is the dollar value of this inventory? (Hint: Assume that the typical part in pipeline inventory is 50 percent completed. Thus, half the labor and variable overhead cost has been added, bringing the unit cost to $80, or $50 + $60/2).
PT Bulan Sabit is a company engaged in fan manufacturingair conditioner with the following production datai. Setup fee = $15ii. Inventory cost per fan per year = $ 125iii. Production capacity per day = 246 fansiv. Production time per fan = 2 daysv. Fan requirement per year = 20,000 fansvi. Safety stock = 1/2 day fan productionIf PT Bulan Sabit wants to implement Kanban, then calculate the needs of the companyas follows:a) Explain the definition and purpose of kanban b) Specify production order quantity c) Calculate the container kanban that must be provided by PT Bulan Sabit Assuming the time used is per year 50 weeks and 5 days per week
Tasty Beverage Co. produces soft drinks, specializing in fruit drinks. Tasty produces 5,000 cans ofproduct per batch. Setup cost for each batch is $50 and each drink costs $0.10 to produce. What is thetotal cost per batch? How much would it cost to fill an order for 100,000 cans?
The weekly demand for a product is 770 units. The standard deviation of dailydemand is 10 units. The firm reviews its inventory every 28 days. Each order for the product arrives 9 days after placement. At the time of review, there are 10 units backorder. If 95 percent of all demand is to be satisfied from items in stock:a) How many units should be the safety stock?b) What’s the product’s inventory status?c) How many units should be ordered for this period?
Nico's Manufacturing uses 2,400 units of a product per year on a continuous basis. The product carrying costs are $60 per year and ordering costs are $250 per order. It takes 20 days to receive a shipment after an order is placed and the firm requires a safety stock of 8 days of usage in inventory. 1. Calculate the economic order quantity (round up to the nearest whole unit) 2. Calculate the total cost per year to order and carry this item. 3. Their supplier has notified the company that if they increase their order quantity by 58 units they will give the company a discount. Calculate the dollar discount that the company will have to at least give to Nico's Manufacturing to be indifferent.
EL Computer produces its multimedia notebook computer on a production line that has an annual capacity of 16,000 units. EL Computer estimates the annual demand for this notebook to be 6,000 units. The cost to set-up the production line is $2345, and the annual holding cost is $20 per unit. Current practice calls for production runs of 500 notebook computer each month. Show your solution. a. What is the optimal production lot size?b. How many production runs should be made each year?c. Would you recommend changing the current production lot size policy from the monthly 500-unit production runs? Why or why not? What is the projected savings of your recommendation?
Race One Motors is an Indonesian car manufacturer. Atits largest manufacturing facility, in Jakarta, the company producessubcomponents at a rate of 300 per day, and it uses these subcomponentsat a rate of 12,500 per year (of250 working days). Holding costsare $2 per item per year, and orde1ing (setup) costs are $30 per order.a) What is the economic production quantity?b) How many production runs per year will be made?c) What will be the maximum inventory level?d) What percentage of time will the facility be producing components?e) What is the annual cost of ordering and holding inventory?
The annual demand of ABC Inc. sole product totaled 450,000 units. Due to uncertainty in supply of items, the maximum possible lead time for the orders is 2 weeks and 1 day. A safety stock of 6,250 units is determined. What is the normal lead time? (Use 360 days) Choices: 1 week and 5 days 1 week 9 days 10 days
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Ollah's Organic Pet Shop sells bags of cedar chips for pet bedding or snacking (buyers choice). The supplier has offered the following terms: Order 1-100 bags, and the price is $6.00 a bag. Order 101 or more and the price is $4.50 a bag. Annual demand is 630, fixed ordering costs are $9 per order, and the per bag holding cost is estimated to be around $2 per year. Suppose the lead time for bags is a consistant 2 weeks, and the average weekly demand is 12.6 bags, with a standard deviation of 3.2 bags. If Ollah wants to maintain a 98% service level, what should her reorder point be? please show calculations.
A plant manager of a chemical plant must determine the lot size for a particular chemical that has a steadydemand of 30 barrels per day. The production rate is 190 barrels per day, annual demand is 10,500 barrels,setup cost is $200, annual holding cost is $0.21 per barrel, and the plant operates 350 days per year.a. Determine the economic production lot size (ELS).b. Determine the total annual setup and inventory holding cost for this item.c. Determine the time between orders (TBO), or cycle length, for the ELS.d. Determine the production time per lot.What are the advantages of reducing the setup time by 10 percent?
Caltex uses overtime, inventory, and subcontracting to ab-sorb fluctuations in demand. An annual production plan isdevised and updated quarterly. Expected demand, availablecapacities, and costs for the next four quarters are givenbelow. Design a production plan that will satisfy demand atminimum cost.Regular production cost per unit $10Overtime production cost per unit $15Subcontracting cost per unit $20Inventory holding cost per unit per period $ 2 Regular Overtime SubcontractingPeriod Demand Capacity Capacity Capacity1 1500 1000 200 5002 1900 1000 200 5003 500 1000 200 5004 2000 1000 200 500

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