Pointe Au Chien Containers, Inc

question 131

Essay

Pointe au Chien Containers, Inc., manufactures in batches; the manufactured items are placed in stock. Specifically, the firm is questioning how best to manage a specific wooden crate for shipping live seafood, which is sold primarily by the mail/phone order marketing division of the firm. The firm has estimated that carrying cost is $4 per unit per year. Other data for the crate are: annual demand 60,000 units; setup cost $300. The firm currently plans to satisfy all customer demand from stock on hand. Demand is known and constant.
a. What is the cost minimizing size of the manufacturing batch?
b. What is the total cost of this solution?

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Definitions:

Type A Personality

A personality trait characterized by high levels of competitiveness, self-imposed stress, and a constant sense of urgency.

Agreeableness

A personality trait that features attributes like kindness, friendliness, warmth, and cooperation.

Cancer-prone Personality

A controversial theory suggesting that certain personality traits could make an individual more susceptible to developing cancer.

Research

The systematic investigation into and study of materials and sources in order to establish facts and reach new conclusions.