1

Annual demand (D and u) is 4,260 tons, and production capacity is 6,000 tons in the...

Question

Annual demand (D and u) is 4,260 tons, and production capacity is 6,000 tons in the...

Annual demand (D and u) is 4,260 tons, and production capacity is 6,000 tons in the roasting plant. Excess inventory has incr
Annual demand (D and u) is 4,260 tons, and production capacity is 6,000 tons in the roasting plant. Excess inventory has increased operational expense and spatial needs within the Starbucks' production facility. Amie Glaser has decided to introduce Just-In-Time (JIT) manufacturing and has asked you to establish a Quality Involvement Team (QIT) team to reduce the roasting machine's setup cost, economic production quantity, and hence, maximum inventory levels. The unit cost per ton remains at $2,400, and the annual holding cost is 30% of the unit cost. Your Quality Improvement Team has reduced setup cost significantly, from the original $650 to $162.50. Given the decreased setup cost, what is the Maximum Inventory Level ( Imax) generated by using the optimal Economic Production Quantity (EPO)? ho 0 47.23 units 0 23.61 units 40.72 units 33.40 units

Answers

Answer) 23.61 units

Given that,

Annual Demand = D = 4260

Annual Production = P = 6000

Holding Cost = H = 30% of 2400 = 720

Setup Cost = S = 162.5

Therefore, 1 - (D / P) = 0.29

Now, Economic Order Quantity = EPQ = √((2 x D x S) / (H x (1 - (D / P)))

= √((2 x 4260 x 162.5) / (720 x (1 - (4260 / 6000)))

= 81.4294

Therefore, EPQ = 81.4294

Maximum Inventory Level = Imax = EPQ x (1 - (D / P)) = 81.4294 x 0.29 = 23.61453

Therefore, Maximum Inventory Level, Imax = 23.61 units


Similar Solved Questions

2 answers
A little help here
A large electroscope is made with "leaves" that are 70 cm longwires with 31 g spheres at the ends.When charged, nearly all the charge resides on the spheres. Ifthewires each make a 30° angle with the vertical (Fig. 16-64),what total charge Q must have been applied to theelectroscope? Ign...
1 answers
Exercise 1-8 Product Costs and Period Costs; Variable and Fixed Costs [LO1-3, LO1-4] Kubin Company's relevant...
Exercise 1-8 Product Costs and Period Costs; Variable and Fixed Costs [LO1-3, LO1-4] Kubin Company's relevant range of production is 23,000 to 27,500 units. When it produces and sells 25,250 units, its average costs per unit are as follows: Average Cost per Unit $ 8.30 $ 5.30 $ 2.80 $ 6.30 $ 4.8...
1 answers
Part 1-2 A merry-go-round rotates at the rate of 0.26 rev/s with an 86 kg man...
Part 1-2 A merry-go-round rotates at the rate of 0.26 rev/s with an 86 kg man standing at a point 2.1 m from the axis of rotation. What is the new angular speed when the man walks to a point 0 m from the center? Consider the merry-go-round is a solid 60 kg cylinder of radius of 2.1 m Answer in units...
1 answers
2. Let t=5w 2 compute cet (AS) 3
2. Let t=5w 2 compute cet (AS) 3...
1 answers
Hi-Value Widgets can sell 50,000 units per year of a new widget at the price of...
Hi-Value Widgets can sell 50,000 units per year of a new widget at the price of $4 per unit. Variable cost is $2.5/unit. Fixed costs (including rent, administrative costs etc.) are $12,000 per year. The firm will need to invest $90,000 in equipment which is fully depreciated over the three-year life...
1 answers
Problem 3A-4 (Algo) Activity-Based Absorption Costing as an Alternative to Traditional Product Costing [LO3-5] Ellix Company...
Problem 3A-4 (Algo) Activity-Based Absorption Costing as an Alternative to Traditional Product Costing [LO3-5] Ellix Company manufactures two models of ultra-high fidelity speakers—the X200 model and the X99 model. Data regarding the two products follow: Product Direct Labor-Hours Annual Produ...
1 answers
Solve the initial-value problem y'"' + y" - y - y = 0, y(0) = 5,...
Solve the initial-value problem y'"' + y" - y - y = 0, y(0) = 5, y'(0) = 1, y" (0) = 9...
1 answers
12. A slide projector has a converging lens whose focal length is 85.000 mm. (a) How...
12. A slide projector has a converging lens whose focal length is 85.000 mm. (a) How far (in meters) from the lens must the screen be located if a slide is placed 87.206 mm from the lens? If the slide measures 24.0 mm (width) x 36.0 mm (height), what are the magnitudes of the (b) width (in mm) and (...
1 answers
ODE problem Implicit equation.2 Consider the ODE (a) Solve the equation by first obtaining explicit equation(s)...
ODE problem Implicit equation.2 Consider the ODE (a) Solve the equation by first obtaining explicit equation(s) for y. Here y : R → R is a scalar function. Your answer should be a family of solution parameterized by a single (b) Show that the function y(x) 0 also solves the equation even thoug...
1 answers
Relate Dominance Concept to those below; 1. Democratic 2. Authoritative 3. Authoritarian
Relate Dominance Concept to those below; 1. Democratic 2. Authoritative 3. Authoritarian...
1 answers
A shared, learned, and symbolic system of values, beliefs, and attitudes that shape and influence how...
A shared, learned, and symbolic system of values, beliefs, and attitudes that shape and influence how people see and behave in the world is a definition of what? Society Community System Culture...
1 answers
The delayed non-match-to-sample task is used for tests of: O autobiographical memory. O priming, explicit memory...
The delayed non-match-to-sample task is used for tests of: O autobiographical memory. O priming, explicit memory ospatial learning and memory....
1 answers
What are the products of photosynthesis other than glucose and oxygen ?
What are the products of photosynthesis other than glucose and oxygen ?...
1 answers
Jake drags his 2 pound teddy bear behind him for a distance of 27 ft. If...
Jake drags his 2 pound teddy bear behind him for a distance of 27 ft. If the angle created by the string and the floor is 60 degrees, what is the total amount of work (in ft-lb) done in pulling the bear? ft-lb Need Help?Read It Submit Answer Save Progress We were unable to transcribe this image...
1 answers
Following are condensed income statements for Uncle Bill's Home Improvement Center for the years ended December...
Following are condensed income statements for Uncle Bill's Home Improvement Center for the years ended December 31, 2020 and 2019 Sales Cost of goods sold Gross profit Operating expenses Net income (ignoring income taxes) 2020 $ 595,320 (445,060) $ 150, 260 (114,070) $36,190 2019 $575,960 (396,4...

-- 0.011443--