Question

Better Bolts Inc. produces 50,000 units each day, and the average number of units in work in process is 200,000. The average annual inventory carrying cost percentage is 25%, and the average work in process is $1,000,000.

Required:
1. Determine the throughput time.
2. Compute the annual carrying costs.
3. If the same daily output can be achieved while reducing the work in process by 50%, determine the new throughput time.
4. What has happened to the velocity of production in part 3?
5. Compute the annual carrying costs for part 3.



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  • CreatedMay 05, 2014
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