Required each year in order to meet the annual demand

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Reference no: EM132184142

JL.51 Carl's Custom Cans produces small containers which are purchased by candy and snack food producers. The production facility operates 300 days per year and has annual demand of 15,000 units for one of its custom cans. They can produce up to 100 of these cans each day. It costs $36 to set up one of their production lines to run this can. (Carl pays $12 per hour for setup labor.) The cost of each can is $1 and annual holding costs are $0.75 per can.

1- What is the optimal size of the production run for this can? (Display your answer to the nearest whole number.)

2- Given your answer to the previous question, how many production runs will be required each year in order to meet the annual demand? (Display your answer up to the nearest whole number.)

3- Suppose the customer for this custom can wants to purchase in quantities of 500 units. What is the required setup cost to make this order quantity an optimal production run quantity for Carl's Custom Cans? (Display your answer to two decimal places.)

4- Based on your answer to the previous question (reduced setup cost), how long (in minutes) should it take to set up this production line? (Display your answer to two decimal places.)

Reference no: EM132184142

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