What is the setup cost based on the desired lot size

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Reference no: EM131360222

Problem -

Rick Wing has a repetitive manufacturing plant producing automobile steering wheels. Use the following data to prepare for a reduced lot size. The firm uses a work year of 305 days.

Annual demand for steering wheels	30,500
Daily demand	100
Daily production (8 hours)	800
Desired lot size (2 hours of production)	200
Holding cost per unit per year	$10

a) What is the setup cost, based on the desired lot size?

b) What is the setup time, based on $40 per hour setup labor?

Reference no: EM131360222

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