Troy University - QM 3345

1)Carol Cagle 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        $25 per hour Annual holding cost $12 per unit

Daily production        976 units/8 hour day

Annual demand         32,400 (270 days each × daily demand of 120 units) Desired lot size   122 units (one hour of production)

 

 

2.

Rick Wing has a repetitive manufacturing plant producing automobile steering wheels. Use the following data to prepare for a reduced lot size. The firm uses a work year of 300 days.

Setup labor cost                                              $60.00 per hour

Annual holding cost                                       $14 per unit

Daily production (8 hours)                           880 units/day

Annual demand for steering wheels      31,500 (300 days × daily demand of 105 units)

Desired lot size (2 hours of production) Q = 220 units

1. Setup cost =
2. Setup time =

 

 

3.

Tej Dhakar's company wants to establish kanbans to feed a newly established work cell. The following data have been provided. Note: This is a level production system.

 

 

 

Daily demand                                                                                                                                           275 units

Production lead time                                                                                                                             2.00 days

Safety stock                                                                                                                                              1.00 day

Kanban size                                                                                                                                               50 units

How many kanbans are needed?

 

 

 

 

 

 

 

 

 

 

4.

Pauline Found Manufacturing, Inc., is moving to kanbans to support its telephone switching-board assembly lines.

Determine the size of the kanban for subassemblies and the number of kanbans needed.

 

 

 

 

Setup cost                                                                                                    $30

Annual holding cost                                                                                  $100 per subassembly

Daily production                                                                                         30 subassemblies

Annual usage                                                                                              2,500 (50 weeks × 5 days each × daily usage of 10 subassemblies)

Lead time                                                                                                      14 days

Safety stock                                                                                                 3 days' production

 

 

 

5.

Maggie Moylan Motorcycle Corp. uses kanbans to support its transmission assembly line. Determine the size of the kanban for the mainshaft assembly and the number of kanbans

needed.

 

 

 

 

Setup cost                                                   $20

Annual holding cost                                $220 per mainshaft

Daily production                                       320 mainshafts/day

Annual usage                                             20,000 (50 weeks × 5 days each × daily usage of 80 mainshafts)

Lead time                                                    2 days

Safety stock                                               1.00 days' production

 

 

 

6.

Discount-Mart, a major East Coast retailer, wants to determine the economic order quantity for its halogen lamps. It currently buys all halogen lamps from Specialty Lighting Manufacturers, in Atlanta. Annual demand is 2,000 lamps, ordering cost per order is $30, carrying cost per lamp is $12.

1. What is the EOQ?
2. What are the total annual costs of holding and ordering (managing) this inventory?
3. How many orders should Discount-Mart place with Specialty Lighting per year?