Solution-What is optimum production quantity

What is optimum production quantity

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Reference no: EM133450698

Arthur Meiners is the production manager of Wheel-Rite, a small producer of metal parts in Kelowna, BC. Wheel-Rite supplies Cal-Tex, a larger assembly company, with 10 000 wheel bearings each year. This order has been stable for some time. Setup cost for Wheel-Rite is $40, and holding cost is $0.60 per wheel bearing per year. Wheel-Rite can produce 500-wheel bearings per day. Cal-Tex is a just-in-time manufacturer and requires that 50 bearings be shipped to it each business day.

1. What is the optimum production quantity?

2. What is the maximum number of wheel bearings that will be in inventory at Wheel-Rite?

3. How many production runs of wheel bearings will Wheel-Rite have in a year?

4. What is the total setup plus holding cost for Wheel-Rite?

Reference no: EM133450698

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What is optimum production quantity

Reference no: EM133450698

Reference no: EM133450698

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