Labor Cost for Set-Up Is $500/hour

question 72

Essay

Labor cost for set-up is $500/hour. If the plant plans on level material use and operates 50 days per year, determine the time it takes to setup.
$$\begin{array} { | l | l | } \hline \text { Annual demand } & 5000 \\\hline \text { Daily production } & 1000 \\\hline \text { Lot size } & 700 \\\hline \text { Holding cost } & \$ 25 \\\hline\end{array}$$

---

Definitions:

Process Capability Index

A statistical measure of process capability, indicating how well a process can meet specified performance standards.

Design Specifications

Detailed descriptions of materials, dimensions, and processes used in the construction of a product.

P-chart

A type of control chart used for monitoring the proportion of defective items in a process over time.

Control Limits

Boundaries in statistical process control that indicate the thresholds for when a process is in or out of control.