Determine the sizes of the lots of the three products

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Reference no: EM132305847

Three pieces are produced in a single machine. The demand ratio for each piece is constant and known. It has been decided that all products will have a common production cycle. During this interval, the machine will produce a lot of each product. No delays are allowed and the annual cost of carrying inventory is 0.20. The following information is available.

Product 1, 2, 3

Annual demand: 15,000, 20,000, 6,000

Annual production: 60,000, 40,000, 50,000

Setup cost: $150, $100, $150

Setup time (days): 1.5, 1.0, 2.0

Cost of Production per unit $10, $5, $30

a) Determine the optimal cycle time.

b) Determine the fraction of time the machine is not working and adjust if necessary.

c) Determine the sizes of the lots of the three products.

Reference no: EM132305847

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