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A Production Manager Is Making a Decision on Batch Size

question 46

Essay

A production manager is making a decision on batch size for a product with an annual demand of 25,000 units per year. The setup cost for each batch is $45 and once the setup is complete, the product may be produced at the rate of 650 units per day. There is a holding cost of $2 per unit per year and the plant operates on a 250-day production year. How big should the production batch be and how long (in days) will it take to produce the batch?


Definitions:

Motor Neurons

Nerve cells that initiate and control the movement of muscles.

Central Nervous System

Comprised of the brain and spinal cord, it is the primary information processing center in the body and controls most functions of the body and mind.

Autonomic Nervous System

The part of the nervous system that controls involuntary actions of the body, such as heart rate and digestion.

Autonomic Nervous System

The part of the nervous system that controls involuntary actions of the body, such as heart rate and digestion, and is divided into the sympathetic and parasympathetic nervous systems.

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