question archive A company can produce a part it uses in an assembly operation at the rate of 50 an hour
A company can produce a part it uses in an assembly operation at the rate of 50 an hour
Subject:Operations ManagementPrice:2.87 Bought7
A company can produce a part it uses in an assembly operation at the rate of 50 an hour. The company operates eight hours a day, 300 days a year. Daily usage of the part is 300 parts. The company uses the part every day. The run size is 6,000 parts. The annual holding cost is $2 per unit, and setup cost is $100. a) How many runs per year will there be? b) assuming that production begins when there are no parts on hand, what is the maximum number of parts in inventory? c) The machine is dedicated to this product, Every so often, preventive maintenance, which requires six working days, must be performed on it. Does this interrupt production cycles, or is there enough time between cycles too perform the maintenance? Explain.
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Answer:
p = 50 parts/hr x 8 hr/day = 400 parts/day
u = 300 parts/day
300 days/yr
Run quantity = 6,000 parts
a. Annual demand = (300 parts/day) x (300 days/yr.) = 90,000 parts/yr.
Annual demand/Run quantity = 90000/6000 = 15 runs/yr.
b. Inventory buildup = p – u = 400 – 300 = 100 parts/day
c. Production takes 15 days: 6000 parts/400 parts/day = 15 days.
Buildup is
100 parts/day x 15 days = 1500 parts.
d. Usage is 300 parts/day for 6 days = 1800 parts.
As 1500 parts is the only maximum inventory. Yes, it is going to interrupt production.
