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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 10,800 wheel bearings each year. This order has been stable for some time. Setup cost for Wheel-Rite is $42, and holding cost is $0.50 per wheel bearing per year. Wheel-Rite can produce 520 wheel bearings per day. Cal-Tex is a just-in-time manufacturer and requires that 49 bearings be shipped to it each business day.
a. What Is the optimum production quantity (round to the nearest whole number)
b. What is the maximum number of wheel bearings that will be in inventory at Wheel-Rite (round to the nearest whole number)
c. How many production runs of wheel bearings will Wheel-Rite have in a year (round to two decimal places)
d. What is the total setup plus holding cost for Wheel-Rite (round to two decimal places)
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