Repetitive manufacturing plant producing trailer hitches

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Reference no: EM13778753

Bill Penny has a repetitive manufacturing plant producing trailer hitches in Arlington, Texas. The plant has an average inventory turnover of only 12 times per year. He has therefore determined that he will reduce his component lot sizes. He has developed the following data for one component, the safety chain clip

Setup labor cost per hour = $ 25

Annual Holding cost per unit year = $ 15

Daily production = 976 units / 8 hours day

Annual Demand = 46,200 (275 days each * daily demand of 186 )

Desired lot size (1 hour or production) = 122 units

Find:

a. set-up time that should be achieved?

Reference no: EM13778753

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