What is the optimal size of the production run for bumpers

Assignment Help Project Management

Reference no: EM133593337

Problem

JL.53 Bob's Bumpers has a repetitive manufacturing facility in Kentucky that makes automobile bumpers and other auto body parts. The facility operates 250 days per year and has annual demand of 51,000 bumpers. They can produce up to 485 bumpers each day. It costs $69 to set up the production line to produce bumpers. The cost of each bumper is $80 and annual holding costs are $34 per unit. Setup labor cost is $28 per hour.

1) What is the optimal size of the production run for bumpers? (Display your answer to the nearest whole number.)

2) Based on your answer to the previous question, and assuming the manufacturer holds no safety stock, what would be the average inventory for these bumpers? (Display your answer to the nearest whole number.)

3) Based on your answer two questions back, how many production runs will be required each year to satisfy demand? HINT: As a general rule, whenever calculating a value that is based on previous calculations in Excel, always be sure to use cell references rather than a rounded value as a calculation input. (Display your answer to the appropriate whole number.)

4) Suppose the customer (an auto manufacturer) wants to purchase in lots of 360 and that Bob's Bumpers is able to reduce setup costs to the point where 360 is now the optimal production run quantity. How much will they save in annual holding costs with this new lower production quantity? (Display your answer to two decimal places.)

5) How much will they save in annual setup costs with this new lower production quantity?

Reference no: EM133593337

Questions Cloud

Would you suggest to increase the size of the project staff : Based on above information, how to create decision tree? Would you suggest to increase the size of the project staff? Why or why not?

Why you think ehrs lead to healthcare provider burnout : Why you think EHRs lead to healthcare provider burnout? What is contributing to this? How can this problem be fixed? Be sure to discuss

Which cause of slow absorption in newborns : To administer the injection safely, the nurse would be cognizant of which cause of slow absorption in newborns

What were some health concerns found during this emergency : What were some health concerns found during this emergency? What cultural values and traditions of the affected community needed to be addressed?

What is the optimal size of the production run for bumpers : What is the optimal size of the production run for bumpers? How much will they save in annual setup costs with this new lower production quantity?

How change strategies such as access to resource and routine : how change strategies such as access to resource and routine mental health screening will utilize interprofessional considerations to ensure successful

Describe how you think the system or individuals could have : Identify 2-3 of the events which occurred that ultimately led to Josie Kings death describe how you think the system or individuals could have done things

How did binary system become so dominant in western culture : Gender is typically discussed as male and female. This is called the gender binary. How did this binary system become so dominant in the Western Culture?

Strategic funding for rural communities in colorado : strategic funding for rural communities in Colorado to support coalition-focused community change to affect obesity by increasing healthy eating and active

User Account

All Pages