This preview shows pages 1–3. Sign up to view the full content.
HOMEWORK
ABC Company makes wheels for its bicycles. The wheels are produced at the rate of 30
an hour. The bicycles are assembled at the rate 10 an hour. The company estimates that it
takes 2 hours to set up the machine that makes the wheels before production can begin.
All workers at the company are paid $15 per hour. Inventory carrying cost is estimated to
be $5.00 per wheel per year. The company operates 8 hours a day, 250 days a year.
a)
Compute the economic production quantity for the wheels.
b)
Compute the maximum inventory.
c)
What is the average inventory?
d)
How long will it take the company to make a batch (or one lot) of wheels?
e)
Compute the average number of setups per year? That is, how many times will the
company produce wheels in a year.
f)
What it Total Cost per year?
g)
What is the machine utilization? That is, what percentage of the time will the
company be using the machine to produce wheels?
h)
What percentage of the time is the machine idle?
i)
What is the time interval between two consecutive runs.
This preview has intentionally blurred sections. Sign up to view the full version.
View Full Document SOLUTION
ABC Company makes wheels for its bicycles. The wheels are produced at the rate of 30
an hour. The bicycles are assembled at the rate 10 an hour. The company estimates that it
takes 2 hours to set up the machine that makes the wheels before production can begin.
The workers are paid $15 per hour. Inventory carrying cost is estimated to be $5.00 per
wheel per year. The company operates 8 hours a day, 250 days a year.
This is the end of the preview. Sign up
to
access the rest of the document.
This note was uploaded on 08/31/2010 for the course GSC 3600 taught by Professor Verma during the Winter '10 term at Wayne State University.
 Winter '10
 Verma

Click to edit the document details