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Crystal Accessories produces paper slicers used in offices and in art stores. The minislicer has been one of its most popular items. Annual demand is 7250 units and is constant throughout the year. Kate Crystal, owner of the firm, produces the minislicers in batches. On average, Kate can manufacture 125 minislicers per day. Demand for these slicers during the production process is 30 per day. The setup cost for the equipment necessary to produce the minislicers is $150. Carrying costs are $1 per minislicer per year and lead time is 5 days.
Problem 1: Determine the following:
a. Minimum cost production lot size
b. Number of production runs per year
c. Cycle time
d. Length of a production run
e. Maximum inventory
f. Total annual cost
g. Reorder point
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