Determine the optimal production quantity, Financial Management

Water Wheelies manufactures high-pressure sprinkler heads. These are produced periodically at a rate of 20,000 per month. Demand is steady at 15,000 per month. Each production run has a set-up cost of $120. Variable direct production costs are $6.00 for labour, $2.00 for parts, and $4.00 for raw materials. Water Wheelies uses an annual inventory holding cost of 20% of the unit cost for carrying the unit for one year.

a.    Determine the optimal production quantity during each production run.

b.    Determine the annual holding cost, set-up cost and total cost.

c.     Determine the maximum inventory.

d.     Determine the cycle time between two production runs in days. Assume 250 days per year. In each cycle compute the number of days the production facility is busy (uptime) and the number of days the production facility is idle (downtime).

e.       (3 points) Water Wheelies can double its production rate by using a new technology, but the set-up cost per production run will also double. Determine the economic production quantity and the annual holding and set-up costs.

Posted Date: 2/14/2013 7:29:47 AM | Location : United States







Related Discussions:- Determine the optimal production quantity, Assignment Help, Ask Question on Determine the optimal production quantity, Get Answer, Expert's Help, Determine the optimal production quantity Discussions

Write discussion on Determine the optimal production quantity
Your posts are moderated
Related Questions
State the second element of capital budgeting decision The second element of capital budgeting decision is the analysis of risk and uncertainty. As the benefits from investment

Q. Show the Compound Value of the Single Flow ? Compound Value of the Single Flow (Lump Sum):- The process of computing future value becomes very cumbersome if they have to be

What are the strategies in managing your finances? How it should be monitor?

Types of Government Stocks Issue of Stock through AuctionThe RBI, on behalf of the government, issues notification to auction government securities, stating the amount and time

Explain cash flow and funds flow analysis with suitable example from an existing corporate entity for at least three years i.e. 2008, 2009.2010.

N egotiation You can also negotiate with the bidders based on the requirements as mentioned below. You can negotiate only with the lowest evaluated responsive and qualified

BLACKWATER PLC (a) Calculation of NPV EV = (0.3 × 0.50) + (0.5 × 1.40) + (0.2 × 2.0)    = 0.15 + 0.70 + 0.40 = 1.25 (i.e.) $ 1.25m To conclude the NPV of the project

Provide three examples of mutually exclusive projects. Mutually exclusive projects are projects which participate against each other for our selection.  If a organization and fir

QUESTION (a) Describe briefly the main security measures to protect E-Banking systems and ensure secure E-Banking transactions. (b) (i) What is a digital certificate? (ii

The standard cost of chemical mixture ~ PQ’ is as follows: 40% of material P @ Rs. 400 per kg. 60% of material Q @ Rs. 600 per kg. A standard loss of 10% is normally anticipated in