Race One Motors is an Indonesian car manufacturer. At its largest manufacturing facility, in Jakarta, the company produces subcomponents at a rate of 300 per day, and it uses these subcomponents at a rate of 12,500 per year (of 250 working days). Holding costs are $2.00 per item per year, and ordering costs are $30.00 per order. Part 2 a) What is the economic production quantity? _________ units (round your response to two decimal places). Part 3 b) How many production runs per year will be made? _________ production runs (round your response to two decimal places). Part 4 c) What will be the maximum inventory level? _______ units (round your response to two decimal places). Part 5 d) What percentage of time will the facility be producing components? _________% (enter your response as a percentage rounded to two decimal places). Part 6 e) What is the annual cost of ordering and holding inventory? $_________ (round your response to two decimal places).
Race One Motors is an Indonesian car manufacturer. At its largest manufacturing facility, in Jakarta, the company produces subcomponents at a rate of 300 per day, and it uses these subcomponents at a rate of 12,500 per year (of 250 working days). Holding costs are $2.00 per item per year, and ordering costs are $30.00 per order. Part 2 a) What is the economic production quantity? _________ units (round your response to two decimal places). Part 3 b) How many production runs per year will be made? _________ production runs (round your response to two decimal places). Part 4 c) What will be the maximum inventory level? _______ units (round your response to two decimal places). Part 5 d) What percentage of time will the facility be producing components? _________% (enter your response as a percentage rounded to two decimal places). Part 6 e) What is the annual cost of ordering and holding inventory? $_________ (round your response to two decimal places).
Purchasing and Supply Chain Management
6th Edition
ISBN:9781285869681
Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Chapter16: Lean Supply Chain Management
Section: Chapter Questions
Problem 10DQ: The chapter presented various approaches for the control of inventory investment. Discuss three...
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Race One Motors is an Indonesian car manufacturer. At its largest manufacturing facility, in Jakarta, the company produces subcomponents at a rate of
300
per day, and it uses these subcomponents at a rate of
12,500
per year (of 250 working days). Holding costs are
$2.00
per item per year, and ordering costs are
$30.00
per order.Part 2
a) What is the economic production quantity?
_________
units (round your response to two decimal places).Part 3
b) How many production runs per year will be made?
_________
production runs (round your response to two decimal places).Part 4
c) What will be the maximum inventory level?
_______
units (round your response to two decimal places).Part 5
d) What percentage of time will the facility be producing components?
_________%
(enter your response as a percentage rounded to two decimal places).Part 6
e) What is the annual cost of ordering and holding inventory?
$_________
(round your response to two decimal places).Expert Solution
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