Demand rate of lug nuts = Numbe of cars produced per day * number of wheels on e

Question

Demand rate of lug nuts = Numbe of cars produced per day * number of wheels on each side * number of lug nuts in each wheel = 350*2*5 = 3500 per day = 3500/8 = 437.5 per hour (considering 8 working hours per day)

Reorder point = demand rate * Lead time (1+policy variable) note that policy variable is safety factor

Reorder point = 437.5*3*(1+0.2) = 1575

Number of lug nut containes required = reorder point / capacity of each container = 1575 / 275 = 5.73 ~ 6 (rounded up)

lug nut containers required = 6

Explanation / Answer

Question 1 (5 points) Along an automobile assembly line, wheels are installed at a single location but each side of the car is considered a separate work station for inventory purposes Each wheel requires 5 lug nuts and both wheelatare installed by a single operator. Lug nuts are supplied to the workstation in buckets of 275 items and the reorder time for an empty bucket is 3 hours. The line produces 350 cars per day. Management has specified that the policy variable will be 0.2. Calculate the number of JIT lug nut containers needed for each side of this workstation

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