A Toy Manufacturer Makes Its Own Wind-Up Motors,which Are Then

question 41

Essay

A toy manufacturer makes its own wind-up motors,which are then put into its toys.While the toy manufacturing process is continuous,the motors are intermittent flow.Data on the manufacture of the motors appears below.
Annual demand (D)= 50,000 units Daily subassembly production rate = 1,000
Setup cost (S)= $85 per batch Daily subassembly usage rate = 200
Carrying cost = $.20 per unit per year
(a)To minimize cost,how large should each batch of subassemblies be?
(b)Approximately how many days are required to produce a batch?
(c)How long is a complete cycle?
(d)What is the average inventory for this problem?
(e)What is the total annual inventory cost (holding plus setup)of the optimal behavior in this problem?

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Definitions:

Interest Rates

The cost of borrowing money or the return on investment for savings, typically expressed as a percentage of the total amount loaned or invested.

Standard Deviations

A statistical measure of the dispersion or variability in a data set, commonly used to quantify the risk associated with a particular investment.

Probability Distribution

A mathematical function that provides the probabilities of occurrence of different possible outcomes for an experiment.

Correlation Coefficient

A statistical measure that calculates the strength and direction of the relationship between two variables, ranging from -1 to 1.