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What is the optimum production quantity
Course:- Financial Management
Reference No.:- EM131366894




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Arthur Meiners is the production manager of? Wheel-Rite, a small producer of metal parts.? Wheel-Rite supplies? Cal-Tex, a larger assembly? company, with 11,200 wheel bearings each year. This order has been stable for some time. Setup cost for? Wheel-Rite is $39?, and holding cost is ?$0.80 per wheel bearing per year. Wheel-Rite can produce 520 wheel bearings per day.? Cal-Tex is a? just-in-time manufacturer and requires that 46 bearings be shipped to it each business day.

a) What is the optimum production quantity? _______units (round your response to the nearest whole number)

b) What is the maximum number of wheel bearings that will be in inventory at Wheel-Rite?_______ units (round your response to the nearest whole number)

c) How many production runs of wheel bearings will Wheel-Rite have in a year?_______runs (round your response to two decimal places)

d) What is the toal setup plus holding cost for Wheel-Rite? $________ (round your response to two decimal places)




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