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Carol Cagle has a repetitive manufacturing plant producing trailer hitches in Arlington, Texas. The plant has an average inventory turnover of only 12 times per year. He has therefore determined that he will reduce his component lot sizes. He has developed the following data for one component, the safety chain clip:
Setup labor cost $25 per hour
Annual holding cost $15 per unit
Daily production 960 units/8 hour day
Annual demand 36,000 (250 days each times daily demand of 144 units)
Desired lot size 120 units (one hour of production)
To obtain the desired lot size, the set-up time that should be achieved = ___ minutes (round your response to two decimal places).
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An analysis of the holding costs, including the appropriate annual holding cost rate.
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A number of drivers of change have transformed the roles, functions and responsibilities of an operations manager over recent years. These drivers have not only been based on technological innovations but also on the need for organisations to develop..
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