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mathxl.com My Pitt Home Problem https https: Mail SIC340 New Makeup Course Home Do Homework... Carol Cagle H...+ 2184 BUSQOM 1070 SEC1030 OPERATIONS MANAGEMENT siyu chen 4/16/18 10:18 PM Homework: HW-CH16 Score: 0 of 1 pt Problem 16.1 Save 1 of 4 (0 complete) HW Score: 0%, 0 of 4 pts Question Help Carol Cagle 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 clip: Setup labor cost $20 per hour Annual holding cost $12 per unit Daily production 976 units/8 hour day Annual demand 38,880 (270 days each x daily demand of 144 units) Desired lot size 122 units (one hour of production) To obtain the desired lot size, the set-up time that should be achieved-minutes (round your response to two decimal places Enter your answer in the answer box and then click Check Answer Clear All Check Answer

Explanation / Answer

Given are following details :

Annual demand = D = 38880

Daily demand = d = 144

Daily production = p = 976

Annual unit holding cost = Ch = $12

Set up cost =$ Cs

Desired Lot size ( as per Economic production quantity model _) = EPQ = 122

Since ,

EPQ = square root ( 2 x Cs x D / Ch x ( 1 – d/p))

        = Square root ( 2 x Cs x 38880 / 12 x ( 1 – 144/976))

          = Square root ( 77600.Cs / 12 x 0.852 )

            = Square root ( 7589.98.Cs)

Therefore ,

122 = Square root ( 7589.98.Cs)

Or, 14884 = 7589.98.Cs

Or, Cs = 14884/7589.98

Or, Cs = 1.961

Therefore , set up cost = $ 1.961

Given set up labour cost = $20 per hour

Therefore , Set up time = ( 1.961/20) x 60 minutes = 5.883 minutes ( 5.88 minutes rounded to 2 decimal places )

SET UP TIME THAT SHOULD BE ACHIEVED = 5.88 MINUTES

SET UP TIME THAT SHOULD BE ACHIEVED = 5.88 MINUTES

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