Question

Arthur Meiners is the production manager of Wheel-Rite, a small producer of metal parts. Wheel-Rite supplies Cal-Tex, a larger assembly company, with 11,000 wheel barings each year. This order has been stable for some time. Setup cost for Wheel-Rite is $42, and holdig cost is $0.40 per wheel bearing per year. Wheel-Rite can produce 510 wheel bearings per day. Cal-Tex is a just-in-time manufacturer and requires that 49 bearings be shipped to it each business day.

a) What is the optimum production quantity? _______units (round your response to the nearest whole number)

b) What is the maximum number of wheel bearings that will be in inventory at Wheel-Rite?_______ units (round your response to the nearest whole number)

c)How many production runs of wheel bearings will Wheel-Rite have in a year?_______runs (round your response to two decimal places)

d)What is the toal setup plus holding cost for Wheel-Rite? $________ (round your response to two decimal places)

Answer 1