A repetitive manufacturing firm is planning on level material use. The following information has been collected. Currently, the firm operates 250 days per year

Annual demand 22,000
Daily demand 88
Daily production 250
Desired lot size (2 hours of production) 63
Holding cost per unit per year $50

a. What is the setup cost, based on the desired lot size?
b. What is the setup time, based on $40 per hour setup labor?


(a) S = leads to = and S = $2.92
(b) Setup time = 4.38 min

Business

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