Explain what is the maximum inventory level, Operation Management

Assignment Help:

A company that makes kitchen faucets has found that demand for its model faucet is fairly constant at the rate of 100,000 units per year. Each model of faucet is made using the same equipment, and it costs $100 in lost production and scrap every time a change is made from producing one model of faucet to another. The cost of materials and labor in each faucet is $40, and the inventory holding cost is 25 percent of this per unit per year. If faucets are produced at the rate of 1,000 per day.

a. How many should be produced in each production run based on 250 working days per year?

b. What is the maximum inventory level?

c. How many days does it take to produce in a round?


Related Discussions:- Explain what is the maximum inventory level

Explain appraising and compensating subordinates, Do you believe that manag...

Do you believe that managers should be given more autonomy to make personnel decisions such as hiring, appraising, and compensating subordinates, or do you believe that managers sh

Developing a service strategy - operations strategy, Developing a Service S...

Developing a Service Strategy - Operations Strategy The figure below gives an outline of the three steps of developing an operations strategy based on the Platts-Gregory appro

Why it is important for marketers know consumer behaviour, Why it is import...

Why it is important for marketers to fully understand today's consumer behaviour? Explain the factors that influence consumer's buying behaviour.

Explain what are the three elements that require integration, What are the ...

What are the three elements that require integration to be successful in operations and supply chain management?

Explain how much repayment of principal, Jan sold her house on December 31 ...

Jan sold her house on December 31 and took a $50,000 mortgage as part of the payment. The 10-year mortgage has a 11% nominal interest rate, but it calls for semiannual payments beg

Explain exceed the amount invested in auto loans, A bank is attempting to d...

A bank is attempting to determine where its assets should be invested during the current year. At present, $500,000 is available for investment in bonds, home loans, auto loans, an

Explain a linear trend equation, Value: 15.00 points Problem 3-2 National S...

Value: 15.00 points Problem 3-2 National Scan, Inc., sells radio frequency inventory tags. Monthly sales for a seven-month period were as follows: Month Sales (000) Units Feb. 17 M

Proposed solutions to combat conflicts of interest, Three major solutions h...

Three major solutions have been proposed to combat the medical industry conflicts of interest detailed above in this paper. The first solution is embodied in the Physician Payments

MB0044, What do you understand by “line balancing”? What happens if balance...

What do you understand by “line balancing”? What happens if balance doesn’t exist?

Explain environmentally safe goods and why, Imagine you are a new product t...

Imagine you are a new product that sells for $1.25 an is environmentally safe. Would you spend thousands of dollars for Green Seal on your impulse product if ambivalent toward such

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd