A company produces two products. The relevant data is shown below:Product 1Suppose thatDemand rate (units/year)Production rate (units/year)Production cost ($/unit)Inventory carrying rate (%/unit/year)2,0004,0002025Product 212,00016,0001525the setup cost for each product is same and $400.the total number of setups used for producing Product 1 and Product 2 is limited by 5.Using Lagrange multiplier technique, determine the optimum order quantity for each product and theminimum total cost.

To find the optimum order quantity for each product and the minimum total cost, we can use the…

Answered: A company produces two products. The…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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30) XYZ Company The XYZ Company uses 175 handles per day. The company operates 300 days per year. It costs $2.00 to carry one handle in inventory for one year. When handle inventory is low, an order is sent to the fabrication department to manufacture more handles. Fabrication can produce handles at a rate of 1500 per day and send the handles over to assembly while production is in progress. The setup for each production run costs $500. Assume the XYZ company orders 9,000 handles at a time (not necessarily the economic order quantity). The order receipt period = _____ days. Group of answer choices a) 6.0 b) 5.8 c) 30.0 d) 51.4 e) 50.0
29) XYZ Company The XYZ Company uses 175 handles per day. The company operates 300 days per year. It costs $2.00 to carry one handle in inventory for one year. When handle inventory is low, an order is sent to the fabrication department to manufacture more handles. Fabrication can produce handles at a rate of 1500 per day and send the handles over to assembly while production is in progress. The setup for each production run costs $500. In order to calculate the EOQ, the XYZ company utilizes the __________ model. Group of answer choices a) Basic EOQ b) Production Quantity c) Optimal Production
VGHC, humanitarian aid service in the Sub-Saharan Africa, operates its laboratory on-site. The lab maintains an inventory of test kits for a variety of procedures. VGHC uses 780 A1C kits each year. Ordering costs are $15 and holding costs are $3 per kit per year. The new price list indicates that orders of fewer than 73 kits will cost $60 per kit, 73 through 144 kits will cost $56 per kit, and orders of more than 144 kits will cost $53 per kit. Determine the optimal order quantity and the total cost.
Mazoon Company sells 500 units resulting in $150,000 of sales revenue, $50,000 of variable costs, and $36,000 of :fixed costs. The number of units that must be sold to achieve $40,000 of operating income is units 380 a O None of the given answers b O units 200 .c O units 152 d O units 390 .e O
A company manufactures hair dryers. It buys some of the components, but it makes the heating elements, which it can produce at the rate of 800 per day. Hair dryers are assembled daily, 250 days a year, at a rate of 300 per day. Because of the disparity between the production and usage rates, the heating elements are periodically produced in batches of 2,000 units. Approximately how many batches of heating elements are produced annually? If production on a batch begins when there is no inventory of heating elements on hand, how much inventory will be on hand two days later? The same equipment that is used to make the heating elements could also be used to make a component for another of the firm’s products. That job would require four days, including setup. Setup time for making a batch of heating elements is a half day. Is there enough time to do this job between productions of batches of heating elements? Explain.
Carol Cagle bas a repetitive manufacturing plantproducing trailer bitches in Arlington, Texas. The plant has anaverage inventory tu rnover of only 12 times per year. She hastherefore determined that she will reduce her component lotsizes. She has developed the following data for one component,the safety chain clip:Annual demand = 31,200 unitsDaily demand = 120 unitsDaily production (in 8 hours) = 960 unitsDesired lot size (I hour of production) = 120 unitsHolding cost per unit per year = $12Setup labor cost per hour = $20How many minutes of setup time should she have her plant manageraim for regarding this component?
The following table provides a random sample of the unit values and annual demands of eight SKUs. SKU Code Unit Value Demand (units) A104 $0.02 D205 $2.60 X104 $4.80 U404 $2.50 L205 $0.36 S104 $0.84 X205 $4.35 L104 $0.23 4,500 30 25 2,500 1,040 380 70 250 Southern Markets Inc. is considering the use of ABC analysis to focus on the most critical SKUs in its inventory. a. Based on the percentage of dollar usage, which class should L205 belong to? Class b. Based on the percentage of dollar usage, which class should L104 belong to? Class
LENILOVESBATO Co. produces various types of floor rugs with many different designs. They typically produce at least 200 rugs with a single machine setup. A cost incurred each time a new rug design is developed is called a(n) a. Unit-level cost b. Batch-level cost c. Product-level cost d. Facility-level cost
A firm produces three products. Product A sells for $60; its variable costs are $20. Product B sells for $200; its variable costs are $120. Product C sells for $25; its variable costs are $10. Last year, the firm sold 1000 units of A 2000 units of B, and 10,000 units of C The firm has fixed costs of $320,000 per year. Calculate the break-even point of the firm.
Emarpy Appliance is a company which produces all kinds of major. Bud Banis, the president of Emarpy, is concerned about the production policy for the company’s bestselling refrigerator. The annual demand for this has been about 8,000 units each year, and this demand has been constant throughout the year. The production capacity is 200 units per day. Each time production starts, it costs the company $120 to move materials into place, reset the assembly line, and clean the equipment. The holding cost of a refrigerator is $50 per year. The current production plan calls for 400 refrigerators to be produced in each production run. Assume there are 250 working days per year. (b) If the company were to continue to produce 400 units each time production starts, how many days would production continue? (c) Under the current policy, how many production runs per year would be required? What would the annual set-up cost be? (d) If the current policy continues, how many refrigerators would be…
Atlanta Manufacturing Company produces products W, X, Y, and Z through a joint process. The joint costs amount to $250,000. Product Units Produced Sales Value at Split-Off Additional Costs of Processing Sales Value After Processing W 750 $10,000 $2,500 $15,000 X 1,500 $30,000 $3,000 $35,000 Y 1,000 $20,000 $4,000 $25,000 Z 1,500 $40,000 $6,000 $45,000 If W is processed further, profits of W will: 1) Increase by $2,500 2) Increase by $12,500 3) Decrease by $23,000 4) Increase by $5,000
27) Ali has a restaurant where the customers use a different number of disposable cups each day he is open. Every 30 days, Ali places an order to replenish his cup inventory. It takes 3 days for the order to arrive, at which point it brings the inventory level up to 4000 cups. It costs Ali $30 to have the order processed. Select all statements that apply to Ali's situation: Group of answer choices a) Ali uses a Continuous Inventory System b) d is constant c) Ali uses a Periodic Inventory System d) Ali uses a Fixed-Order-Quantity Inventory System e) Maximum Inventory Level is constant

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