Non-Slip Tile Company (NST)has Been Using Production Runs of 100,000

question 38

Short Answer

Non-Slip Tile Company (NST)has been using production runs of 100,000 tiles,10 times per year to meet the demand of 1,000,000 tiles annually.The set-up cost is $5,000 per run and holding cost is estimated at 10% of the manufacturing cost of $1 per tile.The production capacity of the machine is 500,000 tiles per month.The factory is open 365 days per year.
a. What production schedule do you recommend?
b. How much is NST losing annually with their present production schedule?
c. What is the maximum number of tiles in inventory under the current policy? under the optimal policy?
d. What fraction of time is the machine idle (not producing tiles) under the current policy? Under the optimal policy?

---

Definitions:

Codetermination

A practice where workers have a role in the management of a company through participation on its board or through committees, common in some European countries.

Social Partnership

Cooperative relationships between the government, employers, and labor unions designed to discuss and negotiate policies benefiting all stakeholders.

Codetermination Rights

Rights that enable workers to participate in management decisions within a company, common in some European countries.

Consultation Rights

The right to be consulted on decisions that affect one's work or employment conditions, often a provision in labor relations or company policies.