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Arthur Meiners is the production manager of Wheel-Rite, a small producer of metal parts. Wheel-Rite supplies Cal-Tex, a larger assembly company, with 10,200 wheel bearings each year. This order has been stable for some time. Setup cost for Wheel-Rite is $41, and holding cost is $0.40 per wheel bearing per year. Wheel-Rite can produce 450 wheel bearings per day. Cal-Tex 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? __ units (round your response to the nearest whole number).
b) What is the maximum number of wheel bearings that will be in inventory at Wheel-Rite?_______ units (round your response to the nearest whole number)
c) How many production runs of wheel bearings will Wheel-Rite have in a year?_______runs (round your response to two decimal places)
d) What is the total setup plus holding cost for Wheel-Rite? $________ (round your response to two decimal places)
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