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Can you please explain the asnwer for #1 (parts A - D) 1) A company manufactures...

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General Management

Can you please explain the asnwer for #1 (parts A - D)

1) A company manufactures hair dryers. It buys some of thecomponents, but it makes the heating element, which it can produceat the rate of 800 per day. Hair dryers are assembled daily, 250days a year, at a rate of 300 per day. Because of the disparitybetween the production and usage rates, the heating elements areperiodically produced in batches of 2,000 units.

A) Approximately how many batches of heating elements areproduced annually?

B) If production on a batch begins when there is no inventory ofheating elements on hand, how much inventory will be on hand twodays later?

C) What is the average inventory of elements, assuming eachproduction cycle begins when there are none on hand?

D) The same equipment that is used to make the heating elementscould also be used to make a component for another of the firm'sproducts. That job would require four days, including setup. Setuptime for making a batch of the heating elements is a half day. Isthere enough time to do this job between production of batches ofheating elements? Explain.

Answer & Explanation Solved by verified expert
4.4 Ratings (638 Votes)
This is a problem that is similar to Economic order quantity However this is about production and often known as Production order quantity POQ or economic production quantity EPQ Either ways it applies same formulas and concept Here however they have not provided and asked for economic production quantities Nonetheless if you look this topic up on your textbook it will help you The set up to the problem is about manufacturing the hair dryers and the corresponding heating units units There is a demand for 300 units per day This makes the annual demand D 300250 75000 units Now there is also production capacity to keep in mind The    See Answer
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