Answer each part of these questions (There are 2 separate questions): Part A 1. A food company can produce its famous meat pies at a rate of 1650 cases of 48 pies each per day. The firm distributes the pies to regional stores and restaurants at a steady rate of 250 cases per day. The cost of setup, cleanup, idle time in transition from other products to pies, etc., is $320. Annual holding costs are $11.50 per case. Assume 250 days per year. (i) Determine the optimum production run (batch size). (ii) Determine the number of production runs per year. (iii) Determine maximum inventory. (vi) Determine total inventory-related (setup and carrying) costs per year (rounded to the nearest dollar). Part B 2. The inventory management costs for a certain product are S = $8 to order, and H = $1 to hold for a year. Annual demand is 2400 units. Consider the following ordering plans: (a) order all 2400 at one time, (b) order 600 once each quarter, and (c) order 200 once each month. (i) Calculate the annual holding and setup costs associated with each plan. (ii) Is there another plan, cheaper than any of these? Calculate this order quantity along with its total annual holding and setup costs. Note: write the whole procedure for every question.



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