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A firm manufactures dishwashers. Production cost of the dishwasher is $320 each. Production rate is 280/day. Demand for the dishwashers is 70/day. Assume 360 days per year and that all months have 30 days. Holding rate is 20% per year. Cost of each set up is $29,867. Management has decided that the production lot size is 7,000. Sketch out the inventory geometry. The figure need not be to exact scale. However, to get full credit, the figure should clearly show max inventory, cycle time, and the time corresponding to peak inventory. Compute the annual set up cost and the annual holding cost. What is Economic Production Lot Size? Sketch out the inventory geometry. The figure need not be to exact scale. However, to get full credit, the figure should clearly show max inventory, cycle time, and the time corresponding to peak inventory. Compute the annual set up cost and the annual holding cost.
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