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Your company manufactures turbine blades for engines in production batches for each type. For one type of blade, the A39T, you have an annual demand of 10,000 units. It costs you $1000 and takes four days to set up each manufacturing run. Holding (storage) cost is $0.50 per unit per year. Once production is set up, 80 units can be produced per day. Daily demand rate for the units is 60 per day.
a. What is the most economical number to produce per production run?
b. How long is each production cycle?
c. How many days, exclusive of setup time are you manufacturing A39T blades?
d. What is the annual holding cost?
The G Banking Group recently reported that it was off shoring (moving) its back-office operations from European country D to India where it already has some significant operations.
Vogel Approximation Methods ( VAM): like the least methods the Vogel Approximation Methods( VAM) also consider the shipping costs. but in a relative sense when making allocations.
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