A Repetitive Manufacturing Firm Is Planning on Level Material Use

question 14

Essay

A repetitive manufacturing firm is planning on level material use. The following information has been collected. Currently, the firm operates 250 days per year.
$$\begin{array} { | l | r | } \hline \text { Annual demand } & 22,000 \\\hline \text { Daily demand } & 88 \\\hline \text { Daily production } & 250 \\\hline \text { Desired lot size (2 hours of production) } & 63 \\\hline \text { Holding cost per unit per year } & \$ 50 \\\hline\end{array}$$ a. What is the setup cost, based on the desired lot size?
b. What is the setup time, based on $40 per hour setup labor?

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