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Buckeye Manufacturing produces heads for engines used in the manufacture of trucks. The production line is highly complex, and it measures 900 feet...

This question was created from Production Scheduling and Change over Costs.doc https://www.coursehero.com/file/27002010/Production-Scheduling-and-Change-over-Costsdoc/

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Buckeye Manufacturing produces heads for engines used in the manufacture of
trucks . The production line is highly complex , and it measures 900 feet in length . Two
types of engine heads are produced on this line : the P-Head and the H-Head . The P-
Head is used in heavy duty trucks and the H-Head is used in smaller trucks . Because
only one type of head can be produced at a time , the line is either set up to
weekend ; costs are \$500 in going from a setup for the P-Head to a setup for the H-
Head , and vice versa . When set up for the P-head , the maximum production rate is
100 units per week and when set up for the H-Head , the maximum production rate is
80 per week .
Buckeye just shut down for the week after using the line to produce the P-Head . The
manager wants to plan production and changeovers for the next eight weeks .
Currently , Buckeye's inventory consists of 125 P-Head and 143 H-Heads . Inventory
carrying costs are charged at annual rate of 19 . 5% of the value of the inventory . The
production cost for the P-Head is \$ 225 , and the production cost for the H-Head is
\$310 . The objective is developing a production schedule is to minimize the sum of
production cost , plus inventory carrying cost , plus changeover cost .
Buckeye received the following requirements schedule form its customer ( an engine
assembly plant ) for the next nine weeks
Product Demand
Week
55
38
I
2
55
38
3
44
30
O
O
45
48
O V a VID {
45
48
36
58
35
, in {
35
58
Safety stock requirements are such that week-ending inventory must provide for at
least 80% of the next week's demand .
Prepare a report for Buckeye's management with a production and changeover

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