Holstein Computing Manufactures an Inexpensive Audio Card (Audio Max) for Assembly

question 105

Essay

Holstein Computing manufactures an inexpensive audio card (Audio Max) for assembly into several models of its microcomputers. The annual demand for this part is 100,000 units. The annual inventory carrying cost is $5 per unit and the cost of preparing an order and making production setup for the order is $750. The company operates 250 days per year. The machine used to manufacture this part has a production rate of 2000 units per day.
a. Calculate the optimum lot size.
b. How many lots are produced in a year?
c. What is the average inventory for Audio Max?
d. What is the annual cost of preparing the orders and making the setups for Audio Max?

Understand the process and rationale behind squaring deviations in variance calculation.

Calculate variance for a given data set.

Determine the strengths and weaknesses of using range, interquartile range, and variance as measures of variability.

Understand the concept and implications of the glass ceiling in organizational advancement.

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Definitions:

Elastic

Refers to the responsiveness of the quantity demanded or supplied of a product to changes in its price.

Decreasing Prices

A situation where the cost of goods or services is becoming lower over time.

Revenue

The total amount of money received by a company for goods sold or services provided during a specific period.

Price Elastic

An indicator of the sensitivity of the demand for a product to alterations in its price.