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Hertz is an international car rental company with their regional offices in New England area having 2,500 cars. On average, eight cars per month require tire and oil change. The tire and oil change cost $850 each. There is also a $120 ordering cost, independent of the number of items ordered. Hertz in New England area has an annual holding cost rate of 30% on tires and oils. It takes two weeks to obtain the items after they are ordered. For each week that a car is out of service, Hertz loses $90 in profit. 1. What is the optimal order quantity? 2. What is the maximum number of backorders? 3. What is the time between orders (cycle time)? 4. What is total annual cost?
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An automobile manufacturer is considering one of two systems for its windshield assembly line. The first is a robotic system that should save money due to a reduction in labor and material cost. This robotic system will cost $400,000. How many automo..
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