Explain what is the maximum inventory level, Operation Management

Assignment Help:

A company that makes kitchen faucets has found that demand for its model faucet is fairly constant at the rate of 100,000 units per year. Each model of faucet is made using the same equipment, and it costs $100 in lost production and scrap every time a change is made from producing one model of faucet to another. The cost of materials and labor in each faucet is $40, and the inventory holding cost is 25 percent of this per unit per year. If faucets are produced at the rate of 1,000 per day.

a. How many should be produced in each production run based on 250 working days per year?

b. What is the maximum inventory level?

c. How many days does it take to produce in a round?


Related Discussions:- Explain what is the maximum inventory level

Characteristics of batch production, Characteristics of Batch Production ...

Characteristics of Batch Production Short Runs: Batch production is characterized by short production runs and frequent changes in set ups. Investment : Needs high in

Identify issues management wants to address, Identify issues management nee...

Identify issues management needs to address. Analyze and evaluate the issues identified and a set of actions management should take to address the issues identified.

Describe in terms of developing a project plan, In terms of developing a pr...

In terms of developing a project plan, specifically recommend how this resource could expedite that process.

Servqual model - consumption of service products, SERVQUAL Model - Consumpt...

SERVQUAL Model - Consumption of Service Products In later publications PZB, having analysed their data using factor analysis, reduced the original ten dimensions to the follow

Explain what are the legal and ethical ramifications, What are the legal an...

What are the legal and ethical ramifications for falsifying a resume?

Formulate the problem of maximizing weekly profit, Problem: A leather c...

Problem: A leather company manufactures leather jackets and leather handbags. A leather jacket requires 8 square feet of leather, while a handbag requires 2 square feet. In ad

What are the advantages of process mapping, What are the advantages of proc...

What are the advantages of process mapping? Advantages of process mapping are as follows: a. It can be used for structured ‘walk by testing to confirm knowing of workflow, c

Explain optimum service level is what percent, In a single period model if ...

In a single period model if shortage cost is four times excess cost then the optimum service level is what percent?

Cellular manufacturing, Hi, How to design a cell layout after forming the p...

Hi, How to design a cell layout after forming the part families and machine routing sequence. Is there any algorithm/heuristics/ mathematical models available to do it ? Please hel

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd