What is the optimum production quantity

Assignment Help Business Economics

Reference no: EM132955182

Question: Arthur is the production manager of WheelRite, a small producer of metal parts. Wheel-Rite supplies CalTex, 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 $.60 per wheel bearing per year. Wheel-Rite can produce 500 wheel bearings per day. CalTex is a just-in-time manufacturer and requires that 50 bearings be shipped to it each business day.

a)What is the optimum production quantity?

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

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

Reference no: EM132955182

Questions Cloud

What accounting principle requires the adjusting entry : A roofing company collects fees, An adjusting entry for this transaction is made at year-end, what accounting principle/concept requires this adjusting entry?

What is the required return on the company shares : Credit Agricole SA is expected to maintain, If the company has a dividend yield of 4.22 per cent, what is the required return on the company's shares?

Governments intervene in international trading relationships : From time to time, governments intervene in international trading relationships for specific reasons. This intervention happens even if their country is a part

Provide all journal entries that are necessary : Provide all journal entries that are necessary in the books of Large Mart to account for the signing of the renting contract (if any)

What is the optimum production quantity : What is the optimum production quantity and What is the maximum number of wheel bearings that will be in inventory at Wheel-Rite

What is the current dividend per share : If it's the company's policy to always maintain a constant growth rate in its dividends, find what is the current dividend per share?

Journal entries to record the transactions : Direct labor hours consumed for P 1,500,000 on the job, which was fully paid. Journal entries to record the transactions

Branch in the current economic integration : You are a Project Manager for a retail Multinational Enterprise (MNE) headquartered in Ontario. As a part of the strategic expansion plan, your company is going

What is the current share price for vivendi sa : Vivendi SA pays a constant €1.62 dividend on its equity. If the required return on this equity is 11 per cent, what is the current share price?

User Account

All Pages