How many lots will be produced each year

Assignment Help Operation Management

Reference no: EM131911823

Question: The famous Widget Company sells widgets at the rate of 80,000 units per year. Each widget sells for $100, and it costs 30 percent to carry widgets in inventory for a year. The process of widget production has been automated over the years, and it now costs $1000 to change over the widget production line to other products that are made on the same line.

a. What is the economical lot size for the production of widgets?

b. How many lots will be produced each year?

c. What are the annual cost of carrying widgets and the annual cost of changeover?

d. What factors or changes in assumptions might cause the Widget Company to produce a larger lot than the economic lot size calculated in part a?

Reference no: EM131911823

Questions Cloud

What must expected return on market : What must the expected return on the market be?

Contribution income and traditional income statement : What is the difference between a contribution income statement and a traditional income statement? Under what circumstances would a firm use each?

Calculate a suitable power rating of the wind generator : ENG733S2 Smart Grid Fundamentals Coursework Assignment. Calculate a suitable power rating of the wind generator. Provide a charge/discharge schedule for battary

Cash flow from the mark-to-market proceeds on contract : Find the cash flow from the mark-to-market proceeds on the contract. Assume that the parity condition always holds exactly

How many lots will be produced each year : The famous Widget Company sells widgets at the rate of 80,000 units per year. Each widget sells for $100, and it costs 30 percent to carry widgets in inventory.

Net present worth from investing in stock : What is the variance and standard deviation of the net present worth from investing in the stock?

Appropriate price for futures using parity relationship : Calculate the appropriate price for December futures using the parity relationship?

How many sweatshirts should the co-op order at one time : The Harvard Co-op orders sweatshirts with the Harvard University emblem on them and sells them for $50 each. During a typical month, 900 sweatshirts are sold.

Temporarily bearish on the stock market : If you are temporarily bearish on the stock market, how many contracts should you sell to fully eliminate your exposure over the next six months?

User Account

All Pages